2019 ANNUAL REPORT of the COOP GROUP Publishing Details

2019 ANNUAL REPORT OF THE COOP GROUP Publishing details

Any statements in this report that do not refer to historical facts relate to the future and do not constitute guarantees of future products and services. They incorporate risks and uncertainties including, but not limited to, future global economic conditions, exchange rates, statutory regulations, market conditions, competitors’ activities and other factors beyond the company’s control.

This report is published in German, French, Italian and English. The German version is authoritative. An online version can be downloaded from www.coop.ch/report

Published by: Coop Cooperative, CH-4002 Basel Editing/Coordination: Coop PR Editorial Team Implementation: Coop PR Editorial Team/gateB AG, Steinhausen/Zug Publication date: March 2020

Information/contact Coop Info Service Postfach 2550 CH-4002 Basel Tel. 0848 888 444 www.coop.ch 2019 Annual Report of the Coop Group

Coop Group business areas 4

Key figures at a glance 5

Foreword 6

Milestones in 2019 8

Strategy and operating environment 10 Profile of the Coop Group 10 Strategies and objectives 10 Economic and political environment 12

To the top with sustainability 13 Overarching topics in the area of sustainability 15

Retail business area 17 Sales formats and range 18 Logistics, IT and property 30 Additional services 32

Wholesale/Production business area 36 Transgourmet Group 37 Production 45

Employees 50 Attractiveness as an employer 51 Training and staff development 52

Corporate governance 55

Coop Group in figures 73 Coop Group business areas 4 Coop Group Annual Report 2019

Coop Group business areas As at 1 March 2020

COOP GROUP

RETAIL WHOLESALE / PRODUCTION

Coop Supermarket Transgourmet Group Coop City Transgourmet Central and Eastern Europe Coop Building & Hobby Transgourmet France Coop@home Transgourmet Österreich Coop Restaurant Transgourmet Switzerland Coop Mineraloel Coop Vitality pharmacies Bell Food Group AG ITS Coop Travel Bell Interdiscount Eisberg Microspot.ch Hilcona Dipl. Ing. Fust Hügli Nettoshop.ch/Schubiger/Service 7000 Livique/Lumimart Coop manufacturing companies Import Parfumerie Chocolats Halba/Sunray Christ Watches & Jewellery Steinfels Swiss Marché Restaurants Schweiz Swissmill Betty Bossi Reismühle Brunnen/Nutrex The Body Shop Switzerland Pearlwater Mineralquellen BâleHotels Coop Bakeries Update Fitness Cave Tropenhaus Frutigen Banana Ripening Plant Coop Immobilien Railcare Others

RETAIL WHOLESALE

PRODUCTION

FÜR BESSERESSER.

Watches & Jewelry KeyCoop figures Group inat figuresa glance Key figures 745 Coop Group Annual Report 2019

Key figures figures at a glance

Key figures at a glance

Total sales Earnings

30 669 CHF million 2 046 CHF million EBITDA 6.9% of net sales Net sales Group 782 CHF million EBIT 2.6% of net sales 29 633 CHF million of which Profit 20 159 CHF million Switzerland 531 CHF million 9 474 CHF million abroad 1.8% of net sales

Net sales segments Equity

17 986 CHF million Retail 10 265 CHF million 50.2% Equity ratio 14 148 CHF million Wholesale/Production

Net sales online trading Cash flow from operating activities

913 CHF million Retail 1 877 CHF million 1 691 CHF million Wholesale/ Production

Employees at 31.12 Investments in tangible fixed assets

47 455 Retail 888 CHF million Switzerland 42 852 Wholesale/Production 360 CHF million abroad

Trainees at 31.12 Sales outlets/markets

2 459 Retail 2 333 Retail 996 Wholesale/Production 145 Wholesale/Production

Net sales Operating result (EBIT) in CHF billion in CHF million as a % of net sales 29.6 29.6 28.2 30 27.3 900 806 9.0 25.9 763 772 782 716 25 750 7.5

20 600 6.0

15 450 4.5 2.8 2.8 2.9 2.6 2.6 10 300 3.0

5 150 1.5

0 2015 2016 2017 2018 2019 0 2015 2016 2017 2018 2019 0 Foreword 6 Coop Group Annual Report 2019

Hansueli Loosli and Joos Sutter

Foreword Coop still on track for success

Despite the difficult environment, Coop can look back on a successful financial year in 2019, in which it generated sales of 30.7 billion francs. Profit amounted to 531 million francs.

In Retail, Coop increased its net sales by 1.4%, to 18 billion francs. With more than 90 000 employees, 2 333 sales outlets, and 42 shopping centres, Coop offers its customers a shopping experience tailored to their needs. In 2019, for instance, the remodel of Volkiland in Volketswil and the new Coop Löwenberg in Murten created modern shopping centres which bring together various sales formats, such as Coop Building & Hobby, CoopCity, as well as Interdiscount, Import Parfumerie and others. In the supermarket segment, more than 110 sales outlets already boast the 2025+ store design. The 2.5% increase in footfall is just one indicator of customers’ apprecia- tion for the high quality of the ranges, with a wide selection of sustainable products, and the diversity on offer in Coop supermarkets.

In the specialist formats, net sales grew to 7.5 billion francs for the whole Group. The Coop City department stores continued to gain market shares. The home electronics segment, with the Interdiscount (+3.4%) and Fust (+2.6%) formats, reported positive growth. Coop Vitality also continued to perform well, with growth of 5.8%. Update Fitness performed particularly well, with growth of 21.8%. With 48 studios, the company is now one of the leading fitness providers in Switzerland. Livique/Lumimart lifted its net sales by 2% to over 200 million francs. With net sales of close to 2.5 billion francs, Coop Mineraloel AG retains the top spot in trade in fuel and in con- Foreword 7 Coop Group Annual Report 2019

venience sales in Switzerland. The 314 related Pronto shops, with their customer-friendly opening hours and big choice of fresh and convenience products, grew by 1.9% last year.

In the online business, Coop continued to make great headway, generating a total of 2.6 billion francs in this channel. The online shops in the home electronics segment were heavily instrumental in this, with growth of 17.5%, to over 600 million francs. One particular milestone was the remodel of Microspot.ch from a home and consumer electronics supplier to a comprehensive online Swiss non-food online shopping centre with a marketplace function. Online supermarket Coop@home posted growth of 5.4% and thus gained market shares.

Net sales of the Wholesale business area – the Transgourmet Group – totalled 9.7 billion francs, which equates to growth in local currency of 3.7%. Transgourmet thus strengthened its position in the European cash & carry and wholesale supplies business, and grew in all countries. Last year, Transgourmet’s primary focus was the expansion of the fresh produce range and the standardization of IT systems across all countries, enabling customized digital services for its customers. Moreover, Transgourmet broadened its dairy expertise in Switzerland with the acquisition of Emmi Frisch-Service AG. In Austria, the company acquired Gastro Profi GmbH and, with it, comprehensive expertise in the rapidly expanding ethic catering segment. In Germany, Sanalogic, one of the leading companies for IT- based catering management in the care sector, is now a wholly-owned subsidiary of Transgourmet.

Net sales of the manufacturing companies grew by 0.5% in local currency, totalling 4.8 billion francs. For the Bell Food Group, the financial year saw big rises in raw material prices for pork in Europe, the organizational restructuring of Bell Germany, the commissioning of Europe’s most modern convenience factory in Marchtrenk in Austria, and a good business performance in Switzerland in the second half of the year.

The Coop Group’s sales of sustainable products grew by 40 million francs in 2019, to over 4.7 billion francs. Sales of organic products also continued to develop well, with growth of 8.4%. As a result, Coop remains the undis- puted number one in this segment. Moreover, with the 2019 “Day of good deeds”, Coop took another important step in its long-standing commitment to society and nature. Hundreds of thousands of volunteers got involved in the day of action, showing their solidarity with their fellow humans and the environment. The numerous actions delighted people of all ages, and created a positive movement in all parts of Switzerland.

The Coop Group is in great shape for the future. It enjoys a very solid financial foundation. And in all business segments it has highly dedicated employees who work tirelessly each day to meet customers’ needs. We are sincerely grateful to them all.

Hansueli Loosli Joos Sutter Chairman of the Board of Directors Chairman of the Executive Committee Milestones in 2019 8 Coop Group Annual Report 2019 Milestones in 2019

January February Coop opens Fooby store in Lausanne Coop opens the first Fooby store in the former Transgourmet takes over Gastro Profi GmbH Transgourmet takes over Kursaal Théâtre on Place Bel-Air in Lausanne. Transgourmet Österreich takes over Gastro Emmi Frisch-Service AG The store is dedicated to craftsmanship, re- Profi GmbH, thus expanding its ethnic catering Transgourmet takes over Emmi Frisch-Service gional products and sustainability. range. The company, which specializes in AG, along with all of its employees. The com- wholesale catering, retains its autonomy. All pany supplies around 600 companies in the 2× 100 000 francs donated to SRC for jobs are retained. food service, hospital and care home, conveni- emergency aid ence store and wholesaler segments. Following Tropical Cyclone Idai, Coop donates 100 000 francs to the Swiss Red Cross (SRC) March for emergency aid in Malawi. In November, another donation is made to an SRC rescue Doris Leuthard joins Coop’s Board of organization after the devastating earthquake Directors in Albania. On 28 March 2019, Coop’s Delegate Assem- bly elects former Federal Councillor Doris Leuthard to Coop’s Board of Directors.

April May June WWF again acknowledges Coop Coop establishes “Day of good deeds” Sapori d’Italia now in Coop supermarkets too The WWF has awarded new environmental Together with five major partners, Coop estab- Coop’s four Sapori-d’Italia stores are very pop- ratings to Switzerland’s main wholesalers and lishes the “Day of good deeds”. In undertaking ular. Now, Coop introduces over 100 authenti- retailers. Since the last rating in 2015, Coop this venture, Coop is seeking to focus attention cally Italian Sapori-d’Italia specialities and new has risen further up the rankings in almost on volunteering and gestures of solidarity with products to its supermarkets. every area covered. Coop’s sustainability per- our fellow human beings. Hundreds of thou- formance is classed as “trendsetting” and, in sands of people volunteered for the inaugural various areas, “visionary”. “Day of good deeds”, which will be an annual event in future. Milestones in 2019 9 Coop Group Annual Report 2019

July August September Coop launches first Swiss multiple-use Microspot.ch becomes a comprehensive Fust opens its new logistics centre system for take away packaging non-food online shopping centre On 12 September, Fust opens its new logistics Coop launches reCIRCLE, the first multiple-use Microspot.ch progresses from a home and con- centre in Oberbüren. After just two years of system in Switzerland for take away packaging. sumer electronics provider to a comprehensive construction work, the surface area of the old The pilot project kicks off in Basel, helping to Swiss online shopping centre. The range has warehouse has been doubled, and logistics reduce the number of disposable dishes used been greatly expanded, with improvements to have been extensively automated. This central for take aways and, therefore, the volume of both delivery and customer services. location delivers to all 156 branches and waste. twelve home delivery depots. Bell Food Group begins operating Europe’s most cutting-edge convenience factory With the commissioning of Europe’s most cutting-edge convenience factory in Austria, the Bell Food Group further consolidates its market position in this segment.

October November Coop City St. Annahof reopens The famous Coop department store in Zurich Coop supports mountains in Upper Valais Microspot.ch becomes a marketplace has a new, modern look following its suc- For each “1 August roll” sold, part of the pro- Microspot.ch introduces the marketplace cessful renovation. The traditional store has ceeds goes to Coop Aid for Mountain Regions. function. From November, selected third-party increased its ranges of jewellery, cosmetics, This campaign enabled Coop’s scheme to retailers can use the Swiss online shopping textiles and toys, and stocks the biggest range fund the vital rehabilitation of Alpe Frid in the centre to sell their products under their own of foods on Bahnhofstrasse. canton of Valais. name and for their own account.

Volkiland opens The new Volkiland is reopened and, with it, the Coop Megastore. Following the complete revamp of the shopping centre, the Megastore now has a total surface area of 5 450 m2 and has been upgraded to the latest store design. Strategy and operating environment 10 Coop Group Annual Report 2019

Strategy and operating environment

With innovative ranges, the expansion of modern store concepts and new formats, Coop is making a statement which strengthens its position on the Swiss retail market. Coop is committed in all areas to digitalization, is automating processes and is adapting its supply chain to new demands. In wholesale, Coop is working with Transgourmet to broaden its expertise and is expanding in its existing markets. Coop is committed to sustainability and verticalization in the production of strategically important goods and benefits from an efficient organization.

Profile of the Coop Group

Active in retail as well as wholesale and production The Coop Group operates in the retail as well as wholesale and production sectors. In the retail sector, Coop operates supermarkets and various specialist formats in Switzerland. The Coop Group is the market leader in many of these formats. In wholesale, the Coop Group operates in Germany, Poland, Roma- nia, Russia, France, Austria and Switzerland through Transgourmet. The Transgourmet Group is Europe’s second-largest cash & carry and food service company. In the production sector, the internationally active Bell Food Group is the biggest company in the Coop Group. In addition to the Bell Food Group, the Coop Group also operates other manufacturing companies in Switzerland.

The Coop Group is a cooperative The Coop Group has a history that goes back over 150 years and it has always been structured along cooperative lines. At the organizational level, it is divided into six regions and has over 2.5 million cooperative members. For the Coop Group, the focus is on the customers – the members of the cooperative. It gears all its efforts to their needs. As a cooperative, the Coop Group does not strive to maximize profits; because of this, it plans sustainably for the long term.

Strategies and objectives

Aligned to the Corporate Profile A shared vision, a shared corporate profile and company-specific mission statements shape the Coop Group’s day-to-day work and corporate culture. Over 90 000 employees share the same Group vision: “Together to the top”. The corporate profile is also the same for all sales formats and companies in the Coop Group. It shows how we perceive our work: close, diverse, distinctive, innovative and partnership-oriented. The mission statements are set out for each company and each format individually and reflect its positioning in the sector and strategic focus. With their respective mission statements, the companies and formats make their contribution to the Group-wide vision and corporate profile. Strategy and operating environment 11 Coop Group Annual Report 2019

Growth and internationalization In terms of growth and internationalization, the Coop Group pursues two strategic thrusts. In retail, efforts are focused on the targeted optimization of the network of sales outlets. This involves making adjustments to the ranges and launching new formats which pick up specific trends. Moreover, the Coop companies engage with digitalization to introduce new online shops and services, further expand the omnichannel offering and make processes more efficient. In this way, the Coop Group is strengthening its position on the domestic market. In wholesale, it is opening up new markets in Europe, thereby expanding the market position of the Transgourmet units. This can be achieved both through organic growth and through acquisitions.

Verticalization For goods of particular strategic importance, Coop is committed to verticalization, i.e. integrating manufacturing companies into its business activities. Whether meat from the Bell Food Group, water from Pearlwater, cereals from Swissmill or chocolate from Chocolats Halba/Sunray, integrating the manufacturing companies enables Coop to respond swiftly to new trends and exploit the synergies between the Retail and Wholesale/Production business areas. The business areas generally work closely together and exploit synergies in purchasing and logistics. Furthermore, the manufacturing companies produce products for retail and wholesale. The objective is to exhaust the availability synergy potential, set the range apart with distinctive products, and attain even greater efficiency, which will translate into lower consumer prices.

Digitalization Coop is pursuing two main strategic thrusts where digitalization is concerned. The primary purpose of digitalization must be to even better meet customers’ individual needs and simplify the shopping process. At the same time, it should make behind-the-scenes processes even more efficient and economi- cal. Coop has devised a digitalization concept specifically for this purpose, which is systematically geared towards customer service and is broken down into seven pillars. Topics such as “E-Business & CRM”, “Category Management & Purchasing”, “Communication”, “Goods flow management” and “Logistics” as well as “E-back office” and “IT Infrastructure” are the priorities. However, Coop also re- gards digitalization as an opportunity to adopt new business models. The significance of digitalization is also behind Coop’s decision to become a main partner of Digital Switzerland and of the digital innovation hub for start-ups, Kickstart Accelerator. Another particularly noteworthy focus is the omnichannel approach, combining online and in-store trading. In 2019, the Coop companies were among the leading Swiss companies in online trading. Almost all specialist formats have an online shop. Goods ordered online can either be delivered to the customer’s home or collected in person at the POS of the specialist format in question or at one of more than 1 100 pick-up stations. Drawing on its wide network of POS, the Coop Group is systematically increasing the number of pick-up stations in Switzerland. In total, the Coop Group operates 40 online shops, 23 of those in retail and 17 in the Wholesale/Production business area. As well as the omnichannel approach, Coop is also committed to the Microspot e-business platform, which is the Coop Group’s non-food platform. This Swiss online shopping centre brings together national and international wholesalers as distributors, and sells an extensive, diverse range of non-food products. Microspot also has products from the Coop Group’s non-food formats, including Coop Building & Hobby, Import Parfumerie and Christ Watches & Jewellery.

Purchasing strategy The aim of Coop’s purchasing strategy is to secure access to raw material sources and safeguard the high quality of those sources. In Switzerland, Coop is committed to long-term partnerships with Swiss agriculture. Purchasing regional and local products, as well as organic products, is an important aspect of this. Sustainability is a key element of purchasing, both at home and abroad. Working with producers in emerging and developing countries in particular, Coop is implementing a multitude of projects which involve high social responsibility and environmental standards. The projects also stabilize income and production in those countries. Strategy and operating environment 12 Coop Group Annual Report 2019

The Coop Group handles the purchasing of food and non-food products in Asia via its subsidiary Euro- group Far East Ltd., which also assists business partners in the Far East in implementing environmental and social standards. Coop subsidiary Alifresca is responsible for purchasing fruit and vegetables in Spain and Italy. As well as providing customers with quality assurance, Alifresca also delivers the goods to all of the Coop Group’s distribution points throughout Europe, ensuring the right quantities reach each market. Agecore, the internationally renowned purchasing alliance in Europe formed to promote the development of cross-border activities in the retail sector, is also seeking to create additional synergies in purchasing. Both nationally and internationally, Coop is committed to long-term partnerships with its suppliers, with whom Coop is optimizing the supply chain and exploiting synergies.

Quality management For over 114 years, Coop has been operating laboratories in order to satisfy stringent product quality requirements. Taking a risk-oriented approach, the laboratories test products for compliance with the statutory quality and safety requirements but, more than that, they check fulfilment of Coop’s own stringent standards, at every stage of the product chain. Business partners of Coop and Coop’s employees also play a crucial role in quality assurance. Coop selects reliable business partners who satisfy the quality requirements and whose manufacturing processes are certified to international standards. There are inspection concepts in place for own-label brands and officially recognized labels which serve to guarantee compliance with the relevant requirements. As well as its own inspection activities carried out by quality assurance experts, Coop also works with independent inspection agencies.

Goal-setting process To ensure that long-term strategies give rise to effective measures each year, the Coop Group has, since 2001, had a uniform, top-down goal-setting process in place. Every year, it defines key objectives that apply to the Group as a whole. Based on these goals, concrete measures are developed right down to the operational levels. With a view to the continuous further development of its sustainability commitment, the Coop Group has set multi-year targets for all divisions covering the three pillars of its sustainability concept.

Economic and political environment

Sales in Swiss retail The Swiss retail sector recovered somewhat in 2019. However, nominal sales increased only slightly. The food sector remained flat and was only marginally up on the previous year’s level. By contrast, the non-food sector rallied and achieved a slight profit for the first time after years of declining sales.

Littering and waste initiatives There was an increased focus on the issues of littering and waste in the year under review. A number of political initiatives are calling for measures for improved recycling systems, bans on plastic, and anti-littering actions. As a responsible retailer, Coop is heavily involved in reducing the use of plastics in packaging and offers reusable containers in its ranges. Coop supports pragmatic solutions which take the polluter-pays principle seriously and take account of the current division of responsibilities between the retail sector and the municipalities. Since 2012, Coop has reduced packaging material by close to 24 000 tonnes. The goal is to save around 4 000 more tonnes of packaging material by the end of 2020. To the top with sustainability 13 Coop Group Annual Report 2019

To the top with sustainability

Sustainability is part of Coop’s corporate DNA and im- bues all its relevant strategies. The focus is on sustainable products, environment and climate protection as well as commitment to employees and society. With its approach to sustainability management, Coop is seeking to make a substantial contribution to the company’s success and the wider public.

Strong awareness of sustainability After 30 years of strong commitment to sustainability, it has become a major part of Coop’s corporate DNA. The Coop Group has enshrined sustainability in its Articles of Association, its Corporate Profile and its missions and integrated it into all relevant strategies and processes. To give one example, sustainability targets are systematically incorporated in the comprehensive target-setting process, the training of employees and in operating processes and procedures.

Through its comprehensive approach to sustainability, the Coop Group seeks to set itself apart by delivering added value in the various markets, securing access to resources and making sustainability a shared value throughout the Coop Group. By doing this, Coop also ensures that the growing demands made by society and politicians are implemented efficiently and credibly throughout its business activities, thus making a contribution to the wider public interest.

Coop’s main reporting channels for its numerous sustainability-related measures are the Coop Member Press, the Internet platform actions-not-words.ch and the integrated Annual Report of the Coop Group. A Sustainability Progress Report is published annually. Sharing specific information, the report provides a detailed insight into Coop’s commitment to sustainability and the percentage of attainment of its multi-year sustainability targets.

Holistic and highly relevant Coop’s sustainability efforts are concentrated on areas in which Coop can achieve significant leverage. These areas are determined by internal analyses and have high social, environmental or economic relevance. When setting priorities, Coop draws on many different tools such as range screening, life assessment cycles, risk monitors and stakeholder dialogue. Societal expectations and political demands are also major factors when choosing priorities.

The key areas are reflected in Coop’s Sustainability strategy concept, which describes how the issue of sustainability is managed at Coop and how sustainability is holistically integrated within the existing management system. The strategy concept is based on three pillars (Sustainable Products, Environ- ment and Climate Protection, and Employees and Social Commitment), which in turn build on the foundation, the strategic basis. The three pillars represent the starting points that the companies of the Coop Group integrate into their business activities. All these elements come together to enable us to successfully implement the sustainability targets, yielding success for the company and benefiting the common good. To the top with sustainability 14 Coop Group Annual Report 2019

To the top with sustainability Impact Corporate success and general public interest

Instruments and processes Implementation

PILLAR 1 PILLAR 2 PILLAR 3 Sustainable Environment and Employees and Starting points products climate protection social commitment

Strategic basis Foundation

The strategic basis Coop is a cooperative and promotes the economic and social interests of its members and its consumers. Economic, environmental and ethical principles secure the cooperative’s competitiveness and continued existence. Sustainability is also pivotal to our Vision 2025+, in which Coop sets itself apart from its competitors through sustainable products and its commitment to sustainability projects. The guid- ing principles of sustainability also contribute to this distinctiveness: they determine which principles apply to the implementation of overarching objectives and are used for internal communication throughout the Coop Group.

Pillar 1: Sustainable products Coop is committed to observing ambitious minimum requirements along the whole value chain, in all product ranges. In addition, Coop is involved in pioneering sourcing projects and long-term partnerships to promote organic farming, fair trade, animal welfare and biodiversity. The own-label sustainability brands and quality seals play an important role here, being the medium through which Coop sets itself apart with the most stringent standards in Swiss retail. Coop promotes sustainable consumption, with conscious range selection, targeted customer information and a variety of advertising activities.

Pillar 2: Environment and climate protection The efficient use of resources and energy also contributes to cutting costs. Coop’s efforts focus on reducing energy consumption and making increased use of renewable energy, as well as the consistent implementation of the “CO2-neutral by 2023” vision, which was adopted back in 2008. Coop has defined a reduction schedule, and the implementation is still on track thanks to its own defined measures and targets. Other important topics are packaging optimization, waste avoidance and recycling, logistics and goods transport, and water management and sustainable construction. Coop is making special efforts to optimize packaging, an area in which it is committed to the responsible use of plastics.

Pillar 3: Employees and social commitment Pillar 3 covers Coop’s commitment to employees and social projects with relevance to society. As an employer, Coop provides training for apprentices, a standardized, progressive collective employment agreement for the whole of Switzerland and a generous pension scheme. By supporting the organizations “Schweizer Tafel” (Swiss Table) and “Tischlein deck dich” (Table Be Set), Coop makes a substantial contribution to the responsible use of foodstuffs. Another key aspect is our commitment to Coop Aid for Mountain Regions and our collaboration with strategic partners such as the Swiss Red Cross (SRC). Coop has also used its public profile to successfully launch the annual “Day of good deeds”, calling on people right across Switzerland to do voluntary good deeds for society and the environment. To the top with sustainability 15 Coop Group Annual Report 2019

Coop Sustainability Fund Coop finances projects from all three pillars through the Coop Sustainability Fund. Customers experience the result of these projects, not just in Coop’s range but when doing their daily shopping. Promo- tions and events for employees and the public are a direct expression of the Fund’s innovative solutions to key social and environmental issues. Through pioneering work in the area of sustainability, Coop raises public awareness of sustainable consumption. The Coop Sustainability Fund currently has access to funds of at least 16.5 million francs a year to implement such projects.

For information about projects run by the Coop Sustainability Fund, visit: www.actions-not-words.ch/fonds.

Strategic anchoring in wholesale and production All companies of the Transgourmet Group as well as the main Coop manufacturing companies have their own sustainability strategies. The strategies are geared towards Coop’s Sustainability strategy concept and each take account of the specific concerns as well as the realities of the relevant markets.

Overarching topics in the area of sustainability

The companies of the Coop Group continued their impressive track record on sustainability in the year under review. Below, we discuss three selected sustainability projects. News on sustainable projects from the individual business areas is assigned to the respective chapters.

Coop’s “Day of good deeds” inspired the whole of Switzerland On 25 May, Coop staged the first ever “Day of good deeds”, galvanizing the whole of Switzerland into doing good deeds. The event was all about voluntary commitment and gestures of solidarity with our fellow human beings. Hundreds of thousands of volunteers – from children, families, clubs and Coop employees to Swiss celebrities – got involved by doing good deeds. The actions included donating blood, cleaning up waterways, and donating food. Five big partners – the Swiss Red Cross, WWF Switzerland, Schweizer Tafel, Tischlein deck dich and the Swiss Scout Movement – joined the initiative and organized hands-on activities for the public right across Switzerland. The “Day of good deeds” will be continued, with the next one taking place on Saturday, 13 June 2020.

For more information about the “Day of good deeds”, visit: www.tag-der-guten-tat.ch

Coop is committed to the responsible use of plastics To meet the growing demand for plastic-free alternatives and unpackaged products, Coop has em- braced a transparent and systematic commitment to reducing plastics. Since 2012, Coop has saved or environmentally optimized around 24 000 tonnes of packaging material. Already, some 40% of organic fruit and vegetables in Coop’s range are unpackaged or available in environmentally optimized packaging. We are seeking to increase this percentage to 60% in the next few years. Furthermore, Coop has set itself the target of optimizing a further 4 000 tonnes of packaging by the end of 2020. In the convenience segment, Coop has introduced reCIRCLE reusable boxes, which have been available since July in all Coop restaurants and Coop Take It outlets, in return for a ten-franc deposit. After use, the boxes can be returned to any participating reCIRCLE restaurant, where they are washed and reused. In addition, Coop added various plastic-free alternatives to the range in the year under review. In October 2019, Coop announced that, from 2020 onwards, it would no longer be giving out free plastic bags at any of the Coop Group’s retail formats in Switzerland.

For more information about reducing plastic at Coop, visit: www.actions-not-words.ch/packaging To the top with sustainability 16 Coop Group Annual Report 2019

Top ranking in BBFAW animal welfare rating For the sixth time in a row, Coop was the only retailer in Switzerland to be awarded a top ranking in the international “Business Benchmark on Farm Animal Welfare” (BBFAW) rating. This means that Coop has been one of the top-level recipients of the internationally-renowned rating since 2013. BBFAW singled out Coop’s high animal welfare standards for particular praise. With its Naturafarm Chicken, Natu- ra-Beef and Natura-Veal, Coop is the only Swiss retailer to also stock a wide range of grass-fed meat as well as organic meat. Coop made further progress with animal welfare by establishing and expanding the Coop milk programme for conventional milk: pasture grazing is now mandatory, and producers are guaranteed a fair price for their milk. Furthermore, Coop supports more than 20 research and development projects aimed at improving animal welfare, which was another factor in the top marks awarded in the latest rating. BBFAW is the world’s leading rating for corporate performance in the area of animal welfare.

WWF again acknowledges Coop as a “pioneer” In April 2019, the environmental organization WWF again acknowledged Coop’s commitment to sustainability. Since the last rating in 2015, Coop has risen further up the rankings in almost every area covered. The WWF classed Coop’s sustainability performance as “trendsetting” and, in various areas, “visionary”. Back in 2006, Coop became the first Swiss retailer to embark upon a strategic partnership with WWF Switzerland. The collaboration focuses mainly on forests, oceans, fish and the climate. The aim of the collaboration is to raise awareness of sustainable consumer behaviour and further expand the range of sustainable products. Coop sees the award as further vindication of its unwavering commitment to people, animals and nature. Retail business area 17 Coop Group Annual Report 2019

Retail business area

Sales formats and range 18

Supermarkets and food formats 18 New Fooby store format opens in Lausanne 18 Marché opens first Zopf & Zöpfli café and renovates Neuenkirch-Ost location 19 Coop’s catering and restaurant business introduces multiple-use take away system 19

Product range diversity 19 Coop is committed to lower consumer prices 19 Prix Garantie makes Coop more attractive to families 19 Coop launches “Happy Cola” own-label brand 19 Plant-based alternatives for burgers and yoghurt 19 First universal CO2 cylinder by Coop Qualité & Prix 20 Organic palm oil in conventional products 20 Coop is committed to sustainable soya 20 Bundling purchasing of non-commercial goods 21 Highlights from the food formats 21

Non-Food specialist formats 23 Microspot.ch becomes Switzerland’s comprehensive non-food online shopping centre 23 Dipl. Ing. Fust commissions extended logistics centre and rolls out SAP 24 Coop City opens Zurich St. Annahof following revamp 24 Import Parfumerie launches customer club 24 Service 7000 and Schubiger Haushalt join forces 24 Highlights from the Non-Food specialist formats 25

Logistics, IT and property 30 Expansion of Aclens distribution centre gathering pace 30 Passabene Mobile available in all supermarkets 30 Digitalization in logistics 30 Artificial intelligence to determine promotional volumes 30 Sustainability in Coop real estate 30 Digitalization of real estate planning 31 Real estate projects 31

Additional services 32 Comprehensive quality management 32 Social commitment 32 Communication and advertising 34 Retail business area 18 Coop Group Annual Report 2019

Retail business area

Coop opens innovative store formats and expands the family-friendly range with sustainable and reasonably-priced products. Microspot.ch evolves into a comprehensive online shopping centre in the non-food segment. In logistics, digitalization projects progress according to schedule.

In 2019, the Coop Group generated net sales of 18 billion francs in retail. Despite numerous price cuts, the Retail business area, excluding fuel and heating oil, was thus able to exceed the previous year’s figure.

Sales formats and range

In the Retail business area, the Coop Group operates supermarkets as well as numerous specialist formats for every customer need. At the end of 2019, it had 2 333 sales outlets throughout Switzerland, which is 20 more than the previous year. Coop also boasts a wide range of online shops and systematically combines online and offline trade (omnichannel). Almost all of Coop’s specialist formats now have their own online shops in addition to their brick-and-mortar stores. The 40 online shops in the retail segment in all achieved growth of 16.3% in 2019 compared with the previous year.

Coop attaches particular strategic importance to its sustainable ranges. In 2019, Coop’s retail sales from sustainable products totalled an encouraging 4.21 billion francs, which was up 3.1% over the previous year (for details see www.coop.ch/sd-report). Sales CHF billion 18 of organic products alone came to 1.47 billion francs, which is an net sales in retail increase of 2.2% year on year.

Supermarkets and food formats

The Coop supermarkets generated net sales of over 10.5 billion francs in 2019. With growth in customer footfall of 2.5%, Coop gained many new customers and significantly increased its market shares. With 931 stores, Coop has the densest network of sales outlets in Switzerland. In the 2019 financial year, 23 new sales outlets were opened and ten closed. Coop implemented the new store concept 2025+ in 35 supermarkets in 2019, bringing the total number of new-style supermarkets to 110. Coop also implemented the 2025+ store concept in the new Coop Megastore in the Volkiland shopping centre, with 5 100 m2 of retail space.

New Fooby store format opens in Lausanne In March, Coop launched a brand-new Fooby store format in Lausanne. The first Fooby store showcases artisanal foods, regional products and sustainability. The Fooby concept store is both a convenience shop and production facility. The former Kursaal dates back to 1901, and has been transformed into a stage for all things food: nearly 1 000 m2 of space is dedicated to smoking fish, roasting coffee, baking bread, making sausages and holding wine tastings. Some 30 employees and experts are on hand to advise interested customers, and regional producers present their exclusive specialities. Furthermore, around 70% of the products are sustainable. Retail business area 19 Coop Group Annual Report 2019

Marché opens first Zopf & Zöpfli café and renovates Neuenkirch-Ost location In November, the first Zopf & Zöpfli café opened in the Coop Volkiland shopping centre. By creating the new format, partners Marché and Betty Bossi are opening up a new market segment: in future, the successful collaboration will be available not just at stations, but also in shopping centres. There are plans to open another branch in the Letzipark shopping in Zurich in the 2020 financial year. In addition, the expansion of Zopf & Zöpfli branches at stations will continue. For Marché, 2019 was dominated by the renovation of the Neuenkirch-Ost location. The Lucerne service area was aligned with the latest restaurant concept. The company also opened a Burger King branch, to ease the strain on the Burger King at the Neuenkirch-West location.

Coop’s catering and restaurant business introduces multiple-use take away system Following a successful pilot, from July Coop offered reCIRCLE reusable boxes in all 178 Coop Restau- rants and Coop Take It outlets. Coop customers use one of the reusable reCIRCLE boxes for their take away menus. If guests spend more than ten francs, Coop rewards their environmentally-conscious behaviour with a 10% discount. The boxes can be returned to places other than Coop: after lunch or sup- per, reCIRCLE boxes can conveniently be handed in at a participating reCIRCLE partner, a Coop Restau- rant, or at Coop Take It.

Product range diversity

As well as stocking the biggest selection of national and international branded products, Coop also stocks numerous own-label brands for every customer need in all its sales formats. In food retailing alone, with over 40 000 products in the food and non-food segment it offers the greatest product range diversity in Switzerland. Besides own-label sustainability brands and quality labels, Coop also stocks other own-label brands that cover diverse customer needs and offer optimum value for money.

Coop is committed to lower consumer prices Coop remained committed to low consumer prices in 2019. Among other things, over several price-cutting rounds, Coop has lowered the prices of many branded articles as well as Prix Garantie products. In the year under review, Coop invested 65 million francs in lower sales prices. Coop announced all of the price adjustments in the Coop Member Press.

Prix Garantie makes Coop more attractive to families Adding over 170 new products, predominantly fresh and family products such as fruit and vegetables, dairy products and cold cuts, Coop began expanding the Prix Garantie range in the year under review. The expansion of the product portfolio is set to continue until the end of 2020. Thanks to these measures, Coop will be able to respond even better to the needs of all customer groups in future, particularly families. The claim remains the same: Prix Garantie is a range of good quality, low-price products.

Coop launches “Happy Cola” own-label brand In May, Coop launched a new own-label brand under the name Happy Cola. This Swiss-made cola alternative is available as Happy Cola Classic and Happy Cola Zero. The products soon caught on with customers: over 35% of all customers who tried Happy Cola have already purchased it a second or third time. Happy Cola has now become established as a serious alternative in the competitive environment of leading cola manufacturers. Coop plans to increase the number of cola alternatives available and to offer its customers even greater choice in future. As well as Coop supermarkets, Coop Restaurants, coop@home, Coop Pronto and Transgourmet all stock Happy Cola.

Plant-based alternatives for burgers and yoghurt In April, Coop became the first retailer to sell the Beyond Burger from California in Swiss supermarkets. Beyond Burger is a plant-based meat alternative which closely resembles the original in flavour, consistency and appearance. The composition of the Beyond Burger is similar to that of a meat burger: pro- teins, fats, trace elements and water. 100 grammes contain 17.6 grammes of purely plant-based pro- teins derived from peas. Beetroot gives the burger its meaty red colour, while coconut oil and potato starch ensure good bite and consistency. Also in April, Coop introduced a plant-based yoghurt alternative based on almonds. As well as being lactose-free, the purely plant-based yoghurts contain little to no sugar. Part of the Karma range, these products are available in three flavours, and are aimed at any- Retail business area 20 Coop Group Annual Report 2019

one who is looking for an alternative to animal products. They supplement the diverse range of more than 600 vegan products at Coop.

First universal CO2 cylinder by Coop Qualité & Prix To meet the growing demand for home carbonation devices, in January Coop very successfully launched the first universal CO2 cylinder under the Qualité & Prix brand. The cylinder is compatible with all standard carbonation appliances, is of a high quality and is environmentally sustainable. Moreover, Coop’s Qualité & Prix CO2 cylinders significantly undercut the prices of the market leader.

Organic palm oil in conventional products In 2018, Coop set itself the goal of using organic bud label palm oil in conventionally manufactured Coop own-label brand foods as well. This is certified palm oil which meets the stringent Bio Suisse guidelines. Where appropriate and technically feasible, Coop is replacing palm oil with other oils and fats in selected own-label brands. If other tropical oils or fats such as coconut oil are used, they must come from Fairtrade and/or Bio-Suisse-certified production. The first products to satisfy the new requirements, including own-label madeleines and chocolate meringue kisses, have been on Coop shelves since 2019. An external evaluation of the sustainability of organic bud label palm oil has found that all Bio Suisse-certified palm oil producers perform very well in regard to land use, working conditions and environmentally-friendly cultivation methods.

Coop is committed to sustainable soya In 2019, Coop became the first retailer in the world to meet all its soya needs in its own-label brands from responsibly produced soya grown to the highest standards. Among other things, those standards require that rainforests are preserved and that no genetically modified soya is grown. Because of its high protein content, soya is widely used as an animal feed. For this reason, soya ends up on Swiss consumers’ tables mainly in the form of eggs, fish, meat and dairy products. Own-label brands account for the majority of this Coop range. Therefore, it is important to Coop that soya in animal feed is sustainably produced, and it has already largely achieved this aim. Moreover, by acquiring sustainability certificates, Coop can ensure that, for every quantity of soya which does not yet meet the requirements, the same quantity of certified soya is produced. This system makes it possible to drive forward the production of sustainable soya.

OWN-LABEL SUSTAINABILITY BRANDS AND QUALITY LABELS

OWN-LABEL TARGET GROUP BRANDS

OWN-LABEL STANDARD BRANDS

This list is a selection of the key own-label brands and quality labels. For more information about Coop own-label brands, visit www.coop.ch/labels Retail business area 21 Coop Group Annual Report 2019

Bundling purchasing of non-commercial goods To exploit synergies, many of the non-commercial goods for the entire Coop Group have been bundled across all countries. The various threads involved in purchasing these goods all come together at the head office in Basel where, together with the specialized services of the Coop Group, purchasers with central responsibility define the requirements and specifications. The resulting bundling effects yield significant savings every year for the Coop Group. In the year under review, Coop focused in particular on bundling the product groups paperboard, packaging material and labels, as well as more complex technical areas such as forklift trucks and trucks.

Highlights from the food formats The table below lists the highlights during the year under review, along with a factsheet on each specialist format. For more information about the Coop Group’s specialist formats, visit www.coop.ch/einkaufen.

The Coop super- • Gains in market share markets have the • 2.5% more customers densest network • Another 35 branches remodelled according to the of sales outlets in new store concept. At the end of 2019, 110 branches had Switzerland been remodelled. • 23 new sales outlets opened • 4 182 training sessions conducted • Coop Passabene Mobile is the first self-scanning system to be introduced across Switzerland in all Coop supermarkets • Paper straws and palm leaf disposable dishes are two ways in which plastics are reduced. • Launch of a cola drink (Happy Cola), produced in-house • Retail première for Beyond Burger (purely plant-based) Factsheet • Launch of Coop own-label brand Conviva health & life

The number one in • 3 filling station shops and 1 standalone newly opened the Swiss conveni- • 5 shops reopened following major refurbishment ence market • More than 500 new products each year • Strong growth in the area of sustainable products by Naturaplan • Expansion of hot dog range at more than 74 locations • Pick-up service at more than 48 locations • Improvement in sustainability with LED lighting, latest generation of cooling systems with cold reservoirs, and Factsheet central electricity purchasing

Coop to go offers • Positive sales trend exclusive take-away • New branch in Coop City St. Annahof Zurich products not available in any Factsheet other Coop format

The online super- • Number of articles increased to 18 000 in German-speaking market with the and western Switzerland biggest range • Success with online counters for meat, fish, cheese and and personal bread delivery to • Digital Commerce Awards 2019: 3rd place in the your front door “Body&Taste” category • New transporter with roof-mounted solar panel to operate refrigeration during waiting times; if the trial is successful, it Factsheet will be deployed on all new vehicles from 2020 Retail business area 22 Coop Group Annual Report 2019

The format for • Opening of the first Fooby store on 6 March 2019 in Laus- artisanal food, anne Bel Air regional products • Wide range of products freshly made in store and sustainability • Around 45 regional producers Factsheet • 70% of products are sustainably produced

The trendy store • Positive sales trend format for vegetari- • Bread/baked goods range expanded, with a vegan sprouted an and vegan wheat croissant products Factsheet

Coop’s Italian • Opening of a sales outlet at Zurich’s main station and at delicatessen store Geneva station • Launch of own-label brand Sapori d’Italia in all Coop supermarkets, with more than 100 authentic Italian specialities Factsheet

Culinary treats • Significant market growth every day, at fair • Further development of the “Vista” design concept, with prices new, innovative elements • Introduction of sustainable “reCIRCLE” solutions to reduce plastic • Replacement of plastic straws and disposable cutlery with Factsheet sustainable cardboard, paper and wood products

The fresh host at • Marché Neuenkirch-Ost remodelled in line with new Marché busy locations concept and successfully reopened • Expansion of clean toilets facilities at the Bellinzona-South and North service areas • Launch of “En Route” customer magazine: information and behind-the-scenes stories about Marché • Opening of Così at Thun station, an Italian concept: enjoy pasta in the restaurant or to take away • New Burger King opens at the Neuenkirch-Ost service area • Remodelling of Burger King at the Würenlos service area, in line with Burger King’s new dining area design • Complete redesign of the Marché Cafébar at the Würenlos Factsheet service area

The take-away • Concept development and opening of a staffed Zopf & Zöpfli format for Zopf, in Café in the Volkiland shopping centre in Zurich all its versions Factsheet

Switzerland’s • Sales growth in the sale of kitchen aids in Switzerland number one for • Launch of a digital subscription to the Betty Bossi magazine cooking and and introduction of other types of subscription indulgence • Development and introduction of state-of-the-art recipe software and preparation of the Betty Bossi recipe database to connect external cooperation partners • Expansion of food consulting for Coop’s catering and restaurant business in the areas of recipe development, Factsheet culinary coaching and mystery eating Retail business area 23 Coop Group Annual Report 2019

Non-Food specialist formats

The specialist formats made use of the 2019 financial year to strategically refine their online shops. On top of this, they also continued to develop their brick-and-mortar stores, and their innovative sales concepts and optimized sites proved a hit with customers. The success of the Non-Food area is indicative of the strategic importance of these measures: with its specialist formats alone, the Coop Group generated net sales ov over 7.5 billion francs in 2019, representing further growth in a declining market. Broadly speaking, the non-food formats succeeded in further increasing or main- taining their market shares. Coop remains a strong presence in home electronics. This segment includes the specialist formats Interdiscount, Microspot.ch, Dipl Ing. Fust and Nettoshop.ch. In 2019, the net sales of the four formats totalled around 2.1 billion francs, which is an increase of 53.4 million compared with the previous year. Consequently, the Coop Group was also able to strengthen its market leadership in this area.

Microspot.ch becomes Switzerland’s comprehensive non-food online shopping centre In 2019, Microspot.ch evolved from a home and consumer electronics supplier to a comprehensive online shopping centre. The new direction is apparent not only in the substantial expansion of the range, but also in improved delivery and customer services, as well as visually in a new look with optimized online shop. From the world of the Coop Group alone, Microspot.ch incorporated more than 34 000 non-food products in the expanded range, including products of Coop Building & Hob- by, Import Parfumerie and Christ Watches & Jewellery. The 1 000+ most popular own-label brands of Coop – such as Naturaline, Qualité & Prix and Oecoplan – can also be found at Microspot.ch. Products of foreign distributors supplement the range. Microspot.ch stocks a total of 400 000 pro over ducts. Individual Coop formats and selected 400 000 third-party retailers have the option of selling their products in the range at products on Microspot.ch under their own name and for their own account. Microspot.ch thus in- Microspot.ch. troduced a new marketplace functionality in the year under review.

Home delivery services have also been greatly expanded. Depending where they live, customers can take advantage of same-day or next-day delivery, including Saturdays. In addition, Microspot.ch launched the “same day delivery” services in the cities of Basel, Berne, Biel, Fribourg, Geneva, Lau- sanne, Lucerne, Olten, St. Gallen, Winterthur and Zurich. “Speed” labelled products ordered by 12 noon can now be delivered that same evening. All orders can also be collected at 450 Coop pick-up locations. Retail business area 24 Coop Group Annual Report 2019

Dipl. Ing. Fust commissions extended logistics centre and rolls out SAP On 12 September 2019, Dipl. Ing. Fust opened its new logistics centre in Oberbüren. Over a two-year construction period, the surface area of the former warehouse was doubled, logistics heavily automated and a floor added for offices. The structure has a giant roof-mounted photovoltaic system, which supplies the building with renewable energy. The 50 000 m2 surface area provides storage for four times more products and reduces delivery times. Thanks to an automated small parts and high-rise warehouse, orders can be processed much faster. Deliveries are made from the Oberbüren site to all 156 Fust branches, twelve home delivery depots and all customers of the online shop. The new logistics centre also houses state-of-the-art Fust repair workshops for a wide array of product groups, and a call centre for the repair service. Dipl. Ing. Fust introduced SAP at the start of the year. The company had already introduced new stock management and route planning software for the home delivery service back in 2016. In 2018, Dipl. Ing Fust issued sales advisors at the branches with a tablet. The new SAP system now links up all IT systems. Fust successfully implemented the first phase of the introduction of SAP as a comprehensive IT system, when the “Kitchen and bathroom” and “Building management” areas went live. The introduction of SAP for all retail processes is scheduled and underway for next year. For 2020, the company plans to connect all branches and the online shop to the software. The GK cash register systems will be connected at a later date.

Coop City opens Zurich St. Annahof following revamp After eight months of refurbishment work, Coop City St. Annahof on Bahnhofstrasse in Zurich opened in mid-November with the new “Bellacasa” store design, which has already been successfully applied to a dozen sales outlets throughout Switzerland. On six levels, with around 10 000 square metres of retail space, visitors can find everything they would expect in a modern department store.

Import Parfumerie launches customer club Import Parfumerie launched its first-ever customer club in June. Called “The Member Club”, Import Parfumerie offers members a 10% welcome discount, a welcome gift, exclusive discounts as well as invitations to events, loyalty gifts and much more. The bonus programme has three membership levels: Bronze, Silver and Gold. The higher the level, the more benefits members of “The Member Club” receive, in addition to the usual Superpoints. The Coop Supercard doubles as the membership card for Import Parfumerie’s club. By the end of 2019, “The Member Club” already had 34 500 members.

Service 7000 and Schubiger Haushalt join forces The organizations of Service 7000 AG and the B2B business of Schubiger Haushalt (a subdepartment of RS Vertriebs AG) were merged with effect from 1 October 2019. Since then, the two companies have been jointly providing their support services. Service 7000 AG is a specialized household appliances service organization for professional property managers. Stock management and administration for the joint service organization has been handled centrally since October, from Service 7000 AG’s head office in Netstal. Schubiger Haushalt’s internal sales force remains in St. Gallen. Both providers continue to operate under their old brand names. The merger improves the quality of repair and exchange services. Retail business area 25 Coop Group Annual Report 2019

Highlights from the Non-Food specialist formats The table below lists the highlights during the year under review, along with a factsheet on each specialist format. For more information about the Coop Group’s specialist formats, visit www.coop.ch/einkaufen.

Number one in the • Further gains in market share Swiss consumer • Strong growth of 30% in online orders electronics market • 43% of online orders collected in-store • Live stock information now shown in the online shop for items available in branches • New facility for product ratings in the online shop • 2 new branches opened in Basel and Wattwil; 9 branches upgraded • Enhanced employee skill levels and customer experience, thanks to new sales trainers • New delivery service for large appliances • New support services, including online purchase of Mobile Protection • Customer satisfaction higher, according to market research Factsheet and customer survey

Switzerland’s • Market position further expanded online shopping • Increase of 15.2% in online sales centre • Complete rebranding, with the new logo and design, as well as improved website with new online support services • Repositioning as Switzerland’s online shopping centre in the non-food segment, with over 400 000 articles • More than 34 000 non-food products of the Coop Group added to range, including more than 1 000 own-label brands • Launch of the marketplace function: third-party retailers sell products on Microspot.ch under their name and for their own account • Continual expansion of the range, by linking up selected distributors and merchants • Same day delivery in 11 major Swiss cities: orders of speed items placed by 12 noon are delivered to the front door that evening, in CO2-free electric vehicles; speed items ordered by 6 p.m. are delivered the next day anywhere in Switzerland, including Saturdays. • New collection facility at 450 Coop pick-up locations • Customer contact also via Chat, WhatsApp and call-back service • New advertising campaign with claim: “Lacking something? Factsheet We’ve got it.” Retail business area 26 Coop Group Annual Report 2019

The second-largest • Further gains in market share department • Implementation of new “Bellacasa” store design store chain in in St. Annahof Zurich Switzerland • Refurbishment and extension of food department in Coop City Lausanne Au Centre, with new additions including a cheese humidor • Opening of integrated Coop-to-go branches in Coop City Zurich St. Annahof and Lausanne Au Centre • High level of customer acceptance of self-service checkouts for cosmetic and hygiene products in Zurich St. Annahof, Zurich Bellevue, Fribourg, Winterthur, Aarau, Bern Ryfflihof, Baden, Olten, Geneva Plainpalais, Geneva Fusterie, Lausanne Au Centre and Basel Pfauen • Successful implementation of the new trouser concept • Successful reopening following remodel in the Coop Volkiland shopping centre, Volketswil • High level of customer satisfaction according to market Factsheet research

Switzerland’s • Market leader in DIY stores leading building • Increase in sales supplies store • Strong growth in online business of 41.1% • Omnichannel leader in the “Home DIY” category according to study by Google/VSV (Verband Schweizerischer Versandhan- del) • Strengthening of sales organization with 4 regions • First trial of self check-out in the Swiss DIY store sector • Expansion of Interlaken sales outlet, and remodelling and refurbishment of Zurich-Oerlikon sales outlet • Opening of Murten combined store • Pilot of immediate “Annanow” delivery at the Zurich-Letzipark sales outlet • 30 years of Coop Oecoplan: successful anniversary of Swit- zerland’s first sustainability brand, with sales growth of 4.6% • Discontinuation of potentially invasive neophytes • Increase of 5.4% in sales of Pro Specie Rara • High level of customer satisfaction increased, according to Factsheet market research

The provider of • Sales growth and increased market share customized furnish- • Strong sales growth of 53.6% at online shops ing solutions • Lumimart is the market leader for lighting • The Livique brand, which was launched a year ago, becomes hugely popular • Gains in sales of customizable products; more than 100 million customized furniture options • Expansion of digital sales assistants to bedrooms and dining rooms

The first choice • New Lumimart Steinhausen opens for lighting • Reopening of upgraded and modernized Livique Egerkingen and Livique Cham stores • Even higher level of customer satisfaction at Livique and Factsheet Lumimart Retail business area 27 Coop Group Annual Report 2019

The leading Swiss • Market leader in perfume market and market share gains provider of prestige • Sales growth of 25.1% in online shop perfumes • Strong growth in ordering in-store from online range • Range in online shop expanded by 10%; expansion of distribution with cosmetics brand MAC • Omnichannel leader in the market according to study by Google/VSV (Verband Schweizerischer Versandhandel) • Launch of “The Member Club” with 34 500 members • Opening of new locations Shopping Arena St. Gallen and Gäupark Egerkingen • Total of eight branches upgraded to the new look • Introduction of makeup toolbelts and flash make-up for all employees in sales • Import Parfumerie and Estée Lauder open another shop-in- shop with the MAC and AVEDA cosmetics brands in Coop City Lausanne Au Centre Factsheet • Higher overall customer satisfaction

The prime destina- • 43.7% sales growth in online shop

Watches & Jewelry tion for watches • Online range expanded by 12% and jewellery • Omnichannel leader in the “Jewellery & Watches” category according to study by Google/VSV (Verband Schweizerischer Versandhandel) • New Christ Bahnhofstrasse Zurich opens • Refurbishment of the Jelmoli Zurich, Coop City Lausanne Au Centre and Volketswil branches • Expansion and growth in own-label jewellery brand • Modernization of wedding ring segment, development of the Christ bridal collection (diamond jewellery, engagement and wedding rings) • Expansion of third-party brand range in the areas of fashion watches and jewellery as well as genuine jewellery • Strong growth in Swiss-made watches and above-average growth in the Christ own-label brand • Positive customer feedback regarding identity, expertise and Factsheet friendliness

Just the job: • Market share gains in electrical appliances number one for • Sustained strong growth of 24% in online business electrical house- • Support for advisory process with tablets in stores hold appliances • IT infrastructure redeveloped based on SAP and upgrading • Opening of expanded and automated logistics centre in your kitchen or Oberbüren bathroom • 5 new stores opened, 6 modernized • Strengthening and focusing the range of services for property managers under the Service 7000 and Schubiger Haushalt brands. • Even higher level of customer satisfaction based on market research by GfK and own customer survey (Net Promoter Factsheet Score) Retail business area 28 Coop Group Annual Report 2019

The biggest online • Further increase of 3% in net sales shop for household • Introduction of new support services (delivery time slots, extended appliances, with warranty) personal advice and • Delivery times shortened service • Online advice now available via Chat feature • Expansion of 1:1 marketing via new e-mail marketing platform Factsheet • Higher repeat purchase rates and customer satisfaction ratings

Everything that • Gains in market share is good for your • Increase of 5.8% in net sales health, from • Sales growth of 122.3% in the online business; presence prescription stepped up on social media, on Instagram and Facebook medicines to • Launch of free hotline for over-the-phone advice from beauty products. pharmacists • Launch of Coop Vitality app with digital medication plan • Expansion of pharmacy network, with six new pharmacies in Basel Erlenmatt, Uster, Zurich Airport, St. Gallen Shopping Arena, Murten, Châtel St-Denis and two takeovers in Delémont and Mellingen • Rollout of new store concept at four locations: Jona, Volketswil, Oftringen, Kriens Schappe • Launch of Taping and Burgerstein Microcare services Factsheet • Increase in sales of generics and own-label brands

The natural and • 10.8% sales growth in online business sustainable cos- • Implementation of new store design in Winterthur and metics Oftringen company • Modernization of Zurich Letzipark sales outlet • New Volkiland branch opened • New look and enhanced functionality for customer club app • The Body Shop sets the target of becoming the most sustainable beauty retailer by 2030 • 25th anniversary of Shea community trade programme in Ghana • New community trade plastic programme in India, the first in the world: in the first year, The Body Shop removes 250 tonnes of plastic from the environment • Customer satisfaction: industry champion in the industry monitor Schweizer Branchenmonitor 2019/2020 in the area Factsheet of “Shopping, Fashion &Lifestyle”

The market leader • Additional market shares gained in Switzerland, with • Hydrogen: two additional facilities planned in 2020 (Crissier a wide network of and Dietlikon) Coop filling stations • Over 35 locations have AdBlue on fuel pumps Factsheet • Cooperation with HitchHike at more than 100 locations

For warmth and • Percentage of orders in the online shop increased to 44% well-being • Percentage of customers purchasing low-emission eco heating oil increases to 63%

Factsheet • Option of CO2 offsetting via Myclimate Retail business area 29 Coop Group Annual Report 2019

Coop’s hotel group • Full renovation of BâleHotel Victoria completed • Takeover of restaurant in Hotel Baslertor by Coop’s catering and restaurant business on 1 July • Restaurant Les Quatre Saisons will be repurposed as a banqueting/event space on 1 January 2020 • Detailed planning of Project Märthof with hotel and catering Factsheet completed; construction work commences at the end of 2019

The travel agent • Launch of dynamic booking system (combining flights with owned by Coop and hotel rooms on a single digital platform) Rewe – Switzerland’s • City breaks added to the product portfolio leading direct seller • Percentage of online sales grows to 34% Factsheet of beach holidays

Leading fitness • Expansion from 40 to 48 locations in 13 cantons; provider in Ger- 3 facilities get a facelift man-speaking • Membership grows by 19.3%, sales by 21.8% Switzerland • 101 people added to the team; now 898 full and part-time employees • New premises for Central Eastern Switzerland; new West Factsheet base in Ostermundigen

Tropical house with • Net sales up 15% compared with previous year a restaurant • Perch and pike perch production increased by 30% • 34% rise in volume of caviar sold • Launch of pre-portioned frozen caviar for events and banquets Factsheet • Lighting in public area switched to LED Retail business area 30 Coop Group Annual Report 2019

Logistics, IT and property

Expansion of Aclens distribution centre gathering pace In June of the year under review, the foundation stone was laid in Aclens for the expansion of the empties collection centre for the Suisse Romande logistics region, which will become the new logistics and administration centre. By centralizing administration and logistics at the Aclens site, Coop is safeguarding optimum supplies for the western Switzerland region in the future. The first phase of the project involved adding 753 m2 to the sectors for dairy products, crossdocking, fruit and vegetables and general goods. A building of around 21 700 m2 is being erected alongside the existing distribution centre. This new building will be used primarily as an empties collection centre, which will take up around 10 700 m2, and will be commissioned in stages by mid-2020. The building, covering approximately 8 600 m2, will house administration for the Coop Suisse Romande sales region, which is currently based at the Renens (VD) site. This means that another 300 or so employees will be joining the site, bringing the total workforce there to just under 850. The new building meets the Minergie standard. The location is expected to become fully operational in 2022.

Passabene Mobile available in all supermarkets In November, Coop became the first retailer to offer the self-scanning system Passabene Mobile in all of its supermarkets across Switzerland. Customers now have the facility in around 1 000 branches to scan items with their mobile iOS or Android de- vice and pay for their virtual shopping basket, bypassing the 1 000 time-consuming scanning process at the cash register. Coop has branches offer been offering Passabene Mobile since 2012 and has continually expanded the system. Alternatively, since 2005 customers have had Passabene Mobile the facility to simplify the shopping experience by using special Coop Passabene digital hand scanners.

Digitalization in logistics Coop’s logistics activities underwent further digitalization in 2019. The focus in the year under review was on optimizing route planning, adding more pick-up stations and improving service logistics. Data specialists at Coop partnered with American startup “Project 44” to produce a visualization of the delivery network. Using methods such as geofencing, it is now possible to compare the route plans with real-time data and continually optimize deliveries. Order picking has also been enhanced by greater digitalization: for the first time, data glasses were used to display pick locations and quantities. Yet more new pick-up stations were added to the network in 2019: customers can also collect their online orders at selected Coop Pronto branches. Since 2019, this has included non-food platform Micro- spot.ch, which now delivers to over 460 pick-up stations.

Artificial intelligence to determine promotional volumes In 2019, as part of the “Promo2017+” project, Coop introduced a new forecasting tool for special-offer items. The tool enables sales outlets to calculate as accurately as possible the quantities they need to order during promotions. In the past, the category managers used a fixed allocation formula to assign the quantities of goods to the sales outlets. This method could not take account of any of the outlets’ remaining stocks from previous promotions. The forecasting tool uses artificial intelligence to calculate with a high degree of accuracy the promotional volume for each sales outlet and item, taking account of stocks at the sales outlets. Furthermore, the outlet is given an indicator of the quality of the forecast volume. As well as improving the accuracy of order quantities, this also reduces food waste and ensures greater freshness.

Sustainability in Coop real estate Energy efficiency and the production of sustainable energy are key considerations for Coop when planning and implementing its real estate projects. All of Coop Immobilien’s buildings are designed and, where possible, certified according to the Minergie requirements. In the year under review, Coop obtained certification for the expansion of the shopping centre in Schwarzenburg, as well as the expansion of the Coop Building & Hobby store in Rickenbach. The newbuild project in Domat Ems and the construction of the new shopping centre in Murten-Löwenberg also achieved certification. In 2019, Coop invested around 2.1 million francs in eight energy-saving modernization projects. These included construc- Retail business area 31 Coop Group Annual Report 2019

tion measures such as optimizing heat generation, improving thermal insulation and the use of efficient LED lighting. Coop has invested a total of around 19 million francs in such measures since 2013. The target of installing new photovoltaic systems was once again exceed by 32%, with a total of approximately 26 400 m2. To give a few examples, Coop installed photovoltaic modules with a surface area of 5 400 m2 on the Gallusmarkt in St. Gallen, 6 670 m2 on the Transgourmet buildings in Hinwil and Kriens and 2 900 m2 in Murten and Löwenberg. Photovoltaic panels with a surface area of 4 500 m2 were also installed in Bassecourt in Western Switzerland.

Digitalization of real estate planning In 2019 Coop planned its first four real estate projects using Building Information Modeling (BIM). This system aims to increase planning efficiency and avoid planning errors. A BIM model was provided to the project planners for the new sales outlet in Vich, the new build in Murten, the sales outlet in Löwenberg, the refurbishment of the TH12 building in Basel and the expansion of the sales outlet in Aadorf. Thanks to the BIM software, each project planner can work on his or her part of the project and submit the data to the BIM coordinator every three to four weeks. The BIM coordinator then draws up a conflict list which the persons involved discuss at a BIM coordination meeting, the aim being to avoid said conflicts.

Real estate projects Coop embarked on a total of 16 real estate projects in 2019 and completed 14, including six newbuilds, eight expansions/refurbishments, two restructuring projects and four modernizations.

Head Office Basel In June, work got underway on the complete renovation of Coop’s head office building at Thiersteiner- allee 12, with the refurbishment of the façade and office space. As part of the modernization, office space on floors 1 to 12 will be refurbished. Catering has been relocated from the 13th floor to the ground floor of the building at Thiersteinerallee 14, so that the 13th floor can be repurposed. The renovation work and commissioning will take place in stages until December 2020.

BâleHotels Since November, the Märthof, a listed building in Basel’s historic centre, has been undergoing work to convert it to a 4-star boutique hotel with 68 rooms. The overall concept for the Märthof was devised by the Property Business Unit, in close collaboration with BâleHotels. The commissioning of the hotel is planned for 2021.

Opfikon-Rümlang A multi-purpose complex with a total usable area of around 80 000 m2 and broad mixed use is to be developed on the border between the municipalities of Opfikon and Rümlang, on two plots in the Bäuler/ Cher area which were secured by Coop with construction rights. A design competition was run, in which ten teams came up with a project proposal. The winning project was developed by Japanese architects Sou Fujimoto. Working with investors and partners from the area of office premises, hotels, health, education and leisure, Coop Cooperative plans to establish a multi-purpose base in a space which currently lacks a clear identity. Rather than a shopping centre in the traditional sense, the plan is to create a place for the immediate and wider environment where people of all ages who live, work or are visiting here can enjoy spending time, feel at ease and pursue a wide variety of activities. Coop will optimize the winning project by 2023 and draw up the design plans in collaboration with the municipalities and the canton.

Volkiland shopping centre On 21 November, after around 30 months of construction work, the Coop Volkiland shopping centre opened its doors in Volketswil. As well as established Coop formats such as the Coop Restaurant, Coop Vitality, Coop Building & Hobby, Interdiscount, Christ Watches & Jewellery, The Body Shop and Import Parfumerie, the shopping centre is also home to new formats such as the Zopf & Zöpfli Café. A Coop City with around 3 300 m2 of retail space has also been built, according to the “Bellacasa” concept, along with a Coop Megastore which has the 2025+ store design and approximately 5 450 m2 of retail space.

Centro Tenero and Murten Löwenberg shopping centres On 28 June, the remodelled mall opened on the upper level of Centro Tenero. After 20 months of construction work, the Murten Löwenberg shopping centre opened its doors on 7 November. In the shop- Retail business area 32 Coop Group Annual Report 2019

ping centre, customers will find a Coop Supermarket with 6 200 m2 of retail space and a Coop Building & Hobby with 4 500 m2 of floor space. Also located in the centre are a 168-seat Coop Restaurant, a Coopy Vitality pharmacy and a branch of “Let’s Go Fitness”.

New Châtel-St-Denis sales outlet The Châtel-St-Denis project opened on 27 November. The former Coop sales outlet was demolished in 2016. In its place, Coop built a new sales outlet, with 2 100 m2 of retail space. A Coop Vitality pharmacy, a Coop Restaurant and an underground car park with 115 customer parking spaces can also be found in the new building. The top floor accommodates 45 apartments and just under 550 m2 of office space.

Additional services

Comprehensive quality management Implementing the new Foodstuffs Ordinance remained a major focus for quality management in 2019. The ordinance necessitates changes to the labelling of all products by 2021. As the basis for implementation, the Coop Guideline on Labelling was revised. Among other things, the guideline stipulates how the origin of raw materials and nutritional information are to be disclosed on Coop own-label brands. Coop’s disclosures regarding the origin of animal-derived raw materials voluntarily exceed the legal requirements and are transparently shown if they make up at least 10% of the food. Since 2012, all sales outlets offering counter service have been audited and certified by independent inspection body q.inspecta for compliance with quality requirements. A total of 407 sales outlets were successfully audited in 2019. These audits were in addition to the 2 500 or so internal quality-control audits conducted by Coop. In its own laboratory, Coop tested around 30 600 random samples from the food and non-food segments for compliance with the requirements. This involved checking more than 835 000 criteria. Owing to the growing supply of fresh products made at the sales outlets, hygiene monitoring is also becoming ever more important in this area. As part of its risk management in the area of product quality, Coop devoted a great deal of time in 2019 to issues surrounding the safeguarding of the supply chain for critical raw materials. Furthermore, Coop clarified the requirements for critical product groups in the non-food segment and made these available to potential suppliers in automated form. The e-learning courses “Safe selling of chemicals” and “Qual- ity management in purchasing” were introduced, to improve employee skills in sales and purchasing.

Social commitment Coop again pursued its commitment to society in 2019 with numerous projects. Through the Coop Sus- tainability Fund alone, Coop invested around 16.85 million francs in charitable projects. For information about other projects besides those listed below, visit actions-not-words.ch

Coop stages the first “Day of good deeds”, encouraging a plethora of good deeds On 25 May, Coop asked people to get involved in the first “Day of good deeds”. This nationwide initiative aimed to focus attention on volunteering and gestures of solidarity with our fellow human beings as well as to motivate the public to do good. Coop’s “Day of good deeds” surpassed all expectations. Hundreds of thousands of volunteers got involved, demonstrating their solidarity with society and the environment. The partners, Swiss Red Cross, WWF Switzerland, Schweizer Tafel (Swiss Table) & Tischlein deck dich (Table Be Set), as well as the Scouts, organized numerous hands-on activities.

More food for the needy thanks to pre-sorting project For many years, the food banks Tischlein deck dich and Schweiz- er Tafel have been picking up food from Coop supermarkets that is of impeccable quality but cannot be offered for sale the 12.4 million next day. This has meant that, each year, around 12.4 million 200-g meals have been distributed to people in need. Coop meals distributed supports both organizations by handing out the food and making an additional financial contribution. To get more sales outlets involved in this system, and enable more fruit and vegetables to be handed out, in 2017 the “Pre-sorting at the sales outlet” project was launched on a trial basis. At the pilot sales outlets, in the evening before the stores closed, fruit and vegetables were sorted into Retail business area 33 Coop Group Annual Report 2019

“still edible” or “I wouldn’t eat” and taken to the distribution centre in the Coop’s usual forms of transport. From there, they are transported to Tischlein deck dich, for distribution to people in need. Having proved a great success, the pilot project was broadened out in 2019. The “Pre-sorting at sales outlets” project meant that, in 2019, a total of 80 tonnes of additional food (fruit and vegetables) could be collected and handed out.

Seed research for non-GM cotton The organic cotton used in Naturaline products has always come from the production sites of bioRe India and bioRe Tanzania. Coop has been supporting these projects for many years. Since genetically modified seed was introduced in India in 2002, the production of non-GM organic cotton has presented a huge challenge. As early as 2013, 95% of the available cotton seeds in India were genetically modified. The seed research project has made it possible to prove that cotton seed is non-GM, and to propagate that seed. Six of the organic cotton seeds from bioRe’s seed research have been approved for commercial marketing, and are suitable for large-scale production in the soil. After nine years of intensive research, this is a major milestone. As a pioneer in the cultivation of organic cotton, bioRe India is now able to begin supplying farmers with organic seed. The Coop Sustainability Fund supports bioRe’s seed research with substantial donations, thus enabling the continued cultivation of organic cotton in India.

Commitment to business education for young people In 2019 Coop once again participated in the “Company Programme” by YES (formerly Young Enterprise Switzerland), awarding a sustainability prize. For the competition, groups of young people came up with an innovative project idea and, with the help of experts, developed it into an actual company, as a practical example through which to learn about the key interrelationships in the world of business.

Coop Aid for Mountain Regions supports Alpe Frid with 382 000 francs The Coop Aid for Mountain Regions programme is committed to improving living and working conditions for the inhabitants of mountain regions and supports Swiss mountain farmers. In 2019, 159 self-help projects were supported to the tune of around 4.8 million francs. The Swiss National Day “Weggen” campaign attracted a lot of attention. For each “1 August roll” sold, as well as other products, part of the proceeds goes towards the scheme for mountain regions. In 2019, this campaign raised a total in excess of 300 000 francs. The Coop Aid for Mountain Regions programme increased the amount to 382 000 francs, enabling the important rehabilitation of Alpe Frid in the canton of Valais. The Zewo recertification, which was obtained during the financial year, certifies that donations by the Coop Aid for Mountain Regions programme are used appropriately, efficiently and effectively.

Promoting the inclusion of handicapped people in the world of work By awarding various contracts to sheltered workshops, Coop promotes the inclusion of handicapped people in the world of work. In 2019, Coop awarded contracts worth over 4.3 million francs to such institutions.

Partnership with SRC Coop is a partner of the Swiss Red Cross (SRC). In the year under review, without any unnecessary red tape, Coop made a donation of 100 000 francs for emergency aid in Malawi in the wake of Tropical Cyclone Idai and donated an equal amount after the earthquake in Albania. Furthermore, Coop donated food worth 384 000 francs to the “2 x Weihnachten” (2 x Christmas) project. Thanks to the Grittibänz fund-raising campaign, Coop raised 108 000 francs for families in need in Switzerland. SRC and Coop ran a very special campaign as part of the “Day of good deeds”: together, they encouraged people to done blood or blood stem cells.

Commitment to more exercise and a healthy diet for children and young people Coop supports the organizations “Fit4future” and “Gorilla”, which run workshops in schools with the aim of encouraging children and young people to do more exercise and eat healthily. “Fit4future” is present in one third of all primary schools and, as well as “play barrels” in the school yard, also runs cookery courses and sports camps. Gorilla inspires young people in schools to do more exercise with freestyle sports, such as street skating and break dancing, and to cook with healthy foods by running nutrition workshops. In the year under review, the two projects enabled more than 21 000 children and young people to take advantage of these schemes. Retail business area 34 Coop Group Annual Report 2019

Communication and advertising

Customer Service answers around 800 000 enquiries Customer Service dealt with around 800 000 customer enquiries in 2019. As well as general queries about Coop, the Coop Member Press and Supercard, the issue of sustainability was a dominant theme, with a lot of questions in particular about the Actions, not words campaign and about plastics. Custom- ers also expressed interest in marketing activities, such as Emoji, Bee Happy and Sea Happy, and en- quired about current advertising campaigns as well as pricing and the range selection.

Image campaigns for the supermarkets Coop launched its new image campaign in April. Central to all the commercials were Coop’s customers and their varying needs. Coop employees also featured heavily in each commercial, supporting customers in a friendly way with their shopping and raising smiles. The new campaign enjoyed a high profile and will be continued in 2020.

Families benefit from loyalty schemes Coop continued to reward its customers’ loyalty in 2019, with a total of four collection promotions. Once again, the focus was on families with children, who enjoyed free products. The “Bee happy” and “Sea happy” promotions also turned the spotlight on sustainability issues. The emoji promotion in the summer also proved very popular once again. In its pre-Christmas business, Coop picked up on the film highlight of the year, in partnership with Disney, in its “Frozen 2” promotion. All four promotions were very popular with customers, which meant they also helped boost sales.

Supercard credit card exceeds target In 2019, more than 3.2 million households right across Switzerland used the Supercard, Switzerland’s largest customer loyalty programme. There was a sustained, sharp rise in use of the Supercard app and of the digital services in the year under review. To facilitate this development, the Supercard login was overhauled and simplified. The new Supercard ID still offers easy and secure access to all Supercard services. The new golden Supercard credit card launched in November 2018 is proving extremely popular and, at the end of 2019, there were already more than 167 000 active cards in circulation. This means that Coop significantly exceeded its ambitious target. The new credit card is available as a Mastercard or Visa. Coop also offers a visa prepaid card, to appeal to people who like full control over their spending.

Coop Mobile successfully launches on the Swisscom network and exceeds targets Since January, Coop Mobile has been using the Swisscom network, which is regarded as the best in Switzerland. Coop Mobile’s offering has already achieved very good results and gained lots of customers, who are particularly drawn by Coop Mobile’s pricing, flexibility and support.

Mondovino wine club Coop’s wine club, Mondovino, remained very popular, Mondovino now has around 160 000 members and more than 6 000 Facebook fans. This is an increase of 10 000 customers compared with the previous year. Mondovino is committed to an omnichannel strategy: wine lovers can experience the club online, at over 820 Coop sales outlets and at the annual Mondovino wine fairs. To further raise the club’s profile, in 2019 Mondovino was a guest at the “Matter of Taste” wine event and was actively involved in “Food Zurich”. Mondo- vino’s wine range now boasts 2 200 wines, Around160000 members complemented by subscriptions and specialities from Casa del Vino and Riegger. Mondovino wine club Mondovino members receive benefits such as weekly club offers and digital coupons. Retail business area 35 Coop Group Annual Report 2019

Continued reliance in social media on video and networking platforms Social media was dominated by Coop’s image campaign and sustainability in 2019. The “Day of good deeds” met with a particularly favourable response on social media. The actions taken by the general public right across Switzerland were shared with the hashtag #TagdergutenTat. Progress was also made with establishing various target group channels: Coop added a Facebook page for Mondovino and an Instagram channel for Coop’s basic training programme. In addition, a special series was created on the Instagram TV channel, in which employees from various areas give an insight into their working day at Coop.

Content House with high readership Coop Member Press evolves into internal agency In 2018, Coop Press was renamed Content House and developed into an internal agency. The Coop Member Press and staff magazine remain the key corporate publishing products produced in the Con- tent House. The weekly newspapers Coopzeitung, Coopération and Cooperazione, which are published in three lan- guages, have a total print run of over 2.5 million copies and a readership of around 3.3 million. The annual survey by independent Swiss media research agency Wemf AG confirms that the Coop Member Press is still Switzerland’s highest circulation and most-read print medium. In the year under review, the regionalization of the Coop Member Press was continued. Special editions on the subjects of cheese, beer and wine were published in 21 sub-regions with different cover themes and cover stories in each region. Furthermore, a special edition of the Coop Member Press and various forms of live reporting accompanied Coop’s first-ever “Day of good deeds”. Employees of the Content House also produced multimedia content commissioned by Coop. The Con- tent House further expanded its range of services in the year under review, implementing more than 110 projects for numerous organizational units of the Coop Group. In the Publishing business segment, for example, the Content House produces the Mondovino magazine, and it has designed various image and information brochures in the Editorial Design area. The Content House added to its skills in video and digital channels, and created short videos, information videos and event reports for a number of internal clients.

Sponsorship for the general public Coop made changes to its sponsorship concept in 2019. There will be a greater emphasis in future on title sponsorship projects and local activities which also directly involve the sales outlets. Family projects remain a strategic focus. One important project in 2019 was the Federal Gymnastics Festival in Aarau, in which Swiss gymnastics clubs compete. Involving around 70 000 gymnasts, the Federal Gym- nastics Festival is Switzerland’s biggest sporting event, and is held every six years. Coop has been a main sponsor of the Festival for many years, and also supports cantonal and regional gymnastics festi- vals. With 160 Coop Gemeindeduell events and seven Coop Andiamo events, Coop is also committed to popular sport in Switzerland.

Media Unit: sustainability issues in the spotlight As one of Switzerland’s biggest media offices, Coop’s Media Unit further intensified dialogue with jour- nalists in 2019. Consequently, heavy media coverage of Coop news continued in the year under review. The opening of the new Fust logistics centre in Oberbüren and the first-ever “Day of good deeds” attracted particularly great media interest. Media reporting also focused on the reduction of plastics in connection with the climate movement. To give some examples, packaging of organic fruit and vegetables was reduced, new packaging solutions were developed for baked goods, we began offering sustainable product alternatives such as wooden toothbrushes, palm leaf dishes and paper drinking straws. The Coop Media Unit issued a total of over 40 media releases and responded to over 1 600 media enquiries in the year under review. Wholesale/Production business area 36 Coop Group Annual Report 2019

Wholesale/Production business area

Transgourmet Group 37 Multi-channel: standardized IT system for the whole Group 37 Customized digital services 38 Expansion of fresh food range 38 Same standards for sustainable sourcing in all countries 39 Sustainable packaging measures 39 Transgourmet Österreich: one takeover and renaming of four cash & carry stores 39 Highlights from the national subsidiaries of the Transgourmet Group 40

Production 45

Bell Food Group 45 Increase in raw material prices for pork 45 Abandonment of German sausage business 45 New manufacturing facility for Serrano ham in Spain 45 The convenience market continues to grow 45 Highlights from the Bell Food Group 46

Coop’s manufacturing companies 47 Chocolats Halba trains cocoa farmers in Ghana 47 Reismühle Brunnen/Nutrex committed to sustainable sourcing 47 Coop bakeries investing in Ticino 47 Highlights from Coop’s manufacturing companies 47 Wholesale/Production business area 37 Coop Group Annual Report 2019

Wholesale/Production business area

The Transgourmet Group continues to expand its fresh produce range. It standardizes IT systems across all countries, enabling customized digital services for its customers. Bell strengthens its position on the convenience market. Coop’s manufacturing companies step up investment in sustainable products.

The Coop Group’s Wholesale/Production business area generated net sales of over 14.1 billion francs in 2019, which is a gain of 2.5% in local currency. 14.1 billion CHF Net sales in wholesale and production

Transgourmet Group

With subsidiary Transgourmet Holding AG, the Coop Group is active in the cash & carry and wholesale supplies market in Germany, Poland, Romania, Russia, France, Austria and Switzerland. In 2019, the Transgourmet Group generated net sales of over 9.7 billion francs from 145 cash & carry stores and wholesale supplies which equates to growth of 3.7% in local currency year on year. The company was thus able to further consolidate its position as the second-biggest in European wholesale. Transgourmet generated sales of 341.5 million francs from sustainable ranges in 2019. This was only possible thanks to exceptional commitment, as sustainable ranges are nowhere near as developed in wholesale as they are in retail, for instance.

Multi-channel: standardized IT system for the whole Group The digitalization of conventional core processes is largely complete in Transgourmet’s wholesale business. Transgourmet is now pursuing the aim of systematically exploiting the options presented by technology in order to improve its range of services and become an innovation leader in this area. As a foundation for this, it has implemented a standardized, Group-wide IT landscape for all national subsidiaries. To provide customers with the best, individual service, the ongoing Transgourmet Multichannel project is establishing a new supply chain management approach, with automated processes. Worka- ble, multifunctional SAP services enable Transgourmet to respond quickly, simply and flexibly at all times, and to fully accommodate all country-specific needs. Transgourmet Germany launched the project, but SAP experiences from other countries and expertise from Coop’s retail business provide regular input. In 2019, a total of three distribution centres and five Selgros/cash & carry stores in Germany were switched to SAP. The SAP solution will be implemented throughout the Group by 2024. Wholesale/Production business area 38 Coop Group Annual Report 2019

Customized digital services Transgourmet has set itself the goal of a 360-degree complete range, with specific additional services and software solutions for catering customers. When it acquired the majority in German start-up Gas- tronovi in 2017, Transgourmet Holding gained valuable expertise to help it achieve this. Gastronovi Office offers a comprehensive and customized end-to-end solution – supply chain management, cash register system, ordering system, table reservation – for the catering sector. Another example is Gasti- vo, a standalone marketplace for the catering business: as a subsidiary of acquisition Team Beverage AG, with this marketplace, which is open to all suppliers and service providers, Gastivo offers one-stop shopping and supports the wholesale beverages sector with digitalization.

Transgourmet Germany’s menu manager, with access to the online shop, also makes it easier for hospi- tals and care homes to plan their shopping and menus.

Since February 2019, customers of Transgourmet France have had access to a new online store, complete with online payment system (transition for e-order to e-commerce online store). Moreover, following on from the 2018 launch of the “e-Quilibre Hygiène” online solution for hygiene management, the year under review saw the launch of “Jardin de Pays”. On this platform, customers can search specifically for fruit and vegetables from the regional range and order the products via Transgourmet. The new Group Intranet (Adobe Intranet) model was also implemented.

Transgourmet Österreich is the exclusive provider of the new “Transgourmet Click&Carry” service: customers fill their personal shopping cart in the online store or via the app and, just two hours later, the order has been picked and packed and is ready for collection from the saved location, at the requested time.

With effect from 1 May 2019, Transgourmet Germany took over Sanalogic GmbH, one of the leading companies undertaking development, implementation and support for complete software solutions for IT-based care management in the care sector. The company advises customers in Germany, Austria, northern Italy and Switzerland. This takeover enables Transgourmet Germany to build further on many years of previous collaboration – in both distribution and development – and to actively participate in shaping technical progress and the automation of processes for the benefit of customers. Sanalogic continues to operate on the market as an independent software provider for the whole care process, including meal planning, recording menu requests, production control and delivery, and purchasing.

Expansion of fresh food range In the year under review, Transgourmet Switzerland took over Emmi Frisch-Service AG, a Swiss trading company born of the merger of Burra and Interfrais. This takeover enables Transgourmet Switzerland to offer customers an even wider range, exploit synergies in national logistics, and broaden its dairy expertise. Its customers include around 700 companies in the food service, hospital and care home, convenience store and wholesaler segments. Merging the activities of Emmi Frisch-Service AG with Transgour- met’s existing supplies business gives customers access to Transgourmet’s entire fresh, food and beverages range. All employees were taken over and both Schlieren, which is the central location for Interfrais, and the Burra brand will be retained.

The cooperation with Eisberg Österreich resulted in a bigger range of ultra-fresh products for Transgour- met in the year under review: a total of 63 articles in the convenience salad and vegetables range as well as eleven gourmet salads under the Transgourmet Quality own-label brand. Freshly cut items are delivered daily, and sent out to catering customers the same day. Outstanding product quality, coupled with the diversity of the range – which also includes customer-specific items – ensure strong customer demand: 189 tonnes were sold in just the first four months of the collaboration.

In Germany, Frischeparadies is the biggest specialist store for, and supplier of high-quality, fresh foods for both catering businesses and private customers. Transgourmet Switzerland introduced a slightly adapted version of the German model at the Basel and Zurich locations in 2019. The typical Frische paradies approach – combination of B2B and B2C with integrated bistro – is an innovative model in Switzerland. Wholesale/Production business area 39 Coop Group Annual Report 2019

Same standards for sustainable sourcing in all countries The Transgourmet national subsidiaries adopted minimum standards for the joint sourcing of own-label products in 2019, in the areas of quality and sustainability including animal welfare. Among other things, these standards require that palm oil at least satisfies the RSPO Mass Balance sustainability standard. In addition, several Transgourmet national subsidiaries have already written their own guidelines on sustainable sourcing, which are based on the relevant Coop guideline. The aim is for all Trans- gourmet national subsidiaries to adopt their own guidelines on sustainable sourcing by 2021.

Sustainable packaging measures In 2019, Transgourmet Germany partnered with external experts to launch a project to develop a comprehensive plastics and packaging strategy. The wide- ranging project, which will continue for several years, focuses on actions involving plastics and packaging in own-label products, in the fresh food segment at cash & carry stores as well as in the range of ToGo products. As 292 items well as laying the foundations for the phased implementation of the strategy, the project involves regular trialling in Origine own-label sustain- of packaging alternatives. The downstream, practical ability brand in Transgourmet implementation of the strategy is particularly helpful to Purchasing and Category Management when it comes to Switzerland’s range identifying sustainable packaging concepts in the supplier pool.

Since the end of 2019, Transgourmet Österreich has been packaging fruit and vegetables in FSC-certified cardboard trays. This saves in excess of 600 000 styrofoam trays each year, which is a major step towards becoming Austria’s most sustainable catering wholesaler. While the plastic stretch film to pro- tect the products will remain in use for now, the ultimate aim is to develop a sustainable alternative.

Transgourmet Österreich: one takeover and renaming of four cash & carry stores In the year under review, Transgourmet Österreich acquired all the shares in Alkoven-based Austrian food wholesaler Gastro Profi GmbH from the Hochreiter Group. Gastro Profi will remain an independent company, while benefiting from Transgourmet’s expertise and synergies. Gastro Profi specializes in ethnic catering, with a range of 800 products and 80 employees. By acquiring the rapidly expanding ethnic pizzerias and kebab restaurants, Transgourmet Österreich is opening up new target groups whose requirements and needs it can now comprehensively meet.

The four successful regional “mein c+c” cash & carry stores, which are well established on the local catering market and serve catering and commercial customers in Graz, Bruck an der Mur, Feldbach and Oberwart, have been trading since June 2019 under the name “Transgourmet Cash & Carry”, offering a wider range and even more support services. This regional offering is strengthened by Transgourmet Click&Carry. Wholesale/Production business area 40 Coop Group Annual Report 2019

Highlights from the national subsidiaries of the Transgourmet Group The table below lists highlights from the year under review at the individual national subsidiaries and companies of the Transgourmet Group, along with a factsheet on each national subsidiary. For more information about the Transgourmet Group, visit www.transgourmet.com.

Transgourmet Central and Eastern Europe

Factsheet

Germany • As of 1 May 2019, Sanalogic GmbH becomes a wholly-owned subsidiary of Transgourmet Germany:. • New Cologne Langel logistics centre built • Expansion of sustainable Ursprung range, including more communication • Launch of own-label range of spices at Transgourmet and Selgros, with around 100 products • Plant-based food (meat-free diet): pilot project in Selgros store • Initial experiences of the SAP project in live mode at Transgourmet companies and in Selgros cash & carry stores • Expansion of gas-fuelled trucks at Transgourmet and start of using biogas • Further rollout of the use of cargo bikes on the last mile at both Transgourmet and at Selgros Cash & Carry • Selgros Stuttgart Feuerbach opens, with its own bistro, dry ageing fridge for dry-aged beef and a new Frischeparadies fresh fish counter • First cash & carry store with solar panels (Selgros Ingolstadt) • 60 years of Selgros marked by numerous in-store promotions and launch of Selgros app • Germany’s first ’fish stakeholder’ scheme launched (first crowdfarming project for restaurants and contract catering) • Continuation of Cooking for Seniors project: publication of cookery book and practical handbook for German retirement homes • Promotion of organic bread box: sustainable foods for first day at school

Poland • Further digitalization of operational business in deliveries to the catering sector and addition of more app functions • Small format adapted for smaller towns such as Siedlce, Slupsk, Gorzów Wlkp – start of construction work on first smaller store in Siedlce • First-ever collaboration with vocational schools to support and safeguard jobs for new employees • Marketing strategy realigned to targeted communication supported by own TV campaign

Romania • Opening of the new C&C store in Baia Mare, in November 2019 • More delivery activities for catering customers • Continuation of loyalty programme for private customers/bonus system • Addition of own-label brands Economy, Quality and Premium to the range • Launch of Topseller own-label brand in the entry-level price segment • All stores switched to LED lighting • Cooling system and refrigerating units in Pantelimon replaced to save energy • Continuation and expansion of the “Health begins on the plate” programme • Comprehensive basic and advanced training programme across all levels and areas • More options for dual training in the cities of Iasi, Cluj, Brasov, Constanta and Bucharest • Development of young chefs’ and senior chefs’ gastronomic expertise as part of the “Arena Bucatarilor Cooking Contest” Wholesale/Production business area 41 Coop Group Annual Report 2019

Russia • Renovation of store in Moscow-Kotelniki, with bigger fresh produce department and LED lighting and according to new concept with bistro • Selgros and Globalfoods join forces to serve professional HoReCa customers, range increased and optimized logistics • Introduction of a CRM module for customer-oriented sales and further development of the mobile app • Pallet pooling with Chep, reduction in harmful emissions and waste volumes

Specialists • Food & Beverage Services GmbH acquires 51% interest in GEVA, a solution provider for the beverage industry. • Transgourmet Seafood wins the Seafood Star 2019 in the categories “Street food products” and “Smoked fish”. • New building and expansion at EVG AG in Eberswalde, including new FP and staging areas • Team Beverage now has ten new wholesale beverages partners, with just under 21 800 catering companies for the wholesale platform: Vendis (Homburg) and Bierhalter (Karlsruhe) • Team Beverage integrates VfG-Vertriebsgesellschaft für Gastronomie-Betriebe (Radeberger’s beverage wholesale business) • The Markt Aktiv Group joins forces with 191 Team Beverage GmbH beverage cash & carry stores • Team Beverage begins delivering beverages to Deutsche Bahn for on-board catering and lounge locations • Catering portal Gastivo passed the 13 000 order mark in September, generating in excess of ten million euros in sales from orders. One key driver of this is the launch of the Gastivo ordering app. • Gastronovi expands into France. Countries opened up: D, A, CH • Gastronovi starts joint advertising and sales campaigns with Selgros C&C, Transgourmet Germany, Switzerland and Österreich • Gastronovi opens a new office in Würzburg. • Sump & Stammer steps up purchasing alliance with companies in the Coop and Transgourmet Group. • Sump & Stammer achieves continued double-digit growth in the cruise segment • Niggeman introduces new supply chain management • Niggeman creates maximum transparency in the traceability of fresh meat, going beyond the legal rules applicable to beef and for all other types of meat as well (poultry, pork, lamb) • Frischeparadies unveils new logo • Frischeparadies gives own-label brand “Frische Paradies” and the Frische Paradies quality label a makeover, adding fish and seafood from Galicia • Frischeparadies expands ASC, MSC, Friend of the Sea, Label Rouge, thus significantly increasing sales of sustainable items • Frischeparadies Munich wins Seafoodstar 2019 • Rollout of new CRM system at Frischeparadies • Frischeparadies is an official partner of Jeunes Restaurateurs, Romantik Hotels and publisher Busche-Verlagshaus (Schlemmer Atlas) Wholesale/Production business area 42 Coop Group Annual Report 2019

Transgourmet France

Factsheet

France • Since February 2019, Transgourmet online store with online payment for orders (transition from e-order online store to genuine e-commerce online store). • Launch of “Premium” product range • Expansion of “Origine” range (approx. 35 articles in 2019) • Introduction of Transgourmet ranges with local products • Further rollout of “Premium” marketing/distribution model in the cities of Nantes, Strasbourg and Toulouse • Launch of a new and exclusive range of small ice-cream sundaes under the “L’Atelier des Ecrins” brand • Introduction of voice-operated order picking system with Personal Digital Assistant (PDA) and light guide system on picking carts • Delivery vehicle drivers equipped with new PDAs (with scanner and camera): visualization of route, customers, display racks and articles, recording of display racks for loading and unloading (rolls), GPS route planning including traffic situation, authentication of delivery (photo and signature) • Expansion of warehouse and completion of renovation of Transgourmet Cash & Carry in Schiltigheim • Truck fleet expanded with alternative drive systems. Target: by 2025, at least 40% of the fleet has been switched to renewable energies and/or alternative fuels • BREEAM certification (Building Research Establishment’s Environmental Assessment Method) for Transgourmet’s site in Aquitaine (Saint-Loubès) • ISO 14001 certification for Transgourmet France head office • ISO 22000 certification for all Transgourmet Operations locations (except Transgourmet Seafood, Transgourmet Laplace and Transgourmet BP East). • Road safety awareness and prevention campaign for employees • Accelerated campaign to integrate people with disabilities in the world of work.

Specialists • Launch of Gastronovi in France as part of Transgourmet Solutions • ISO 14001 recertification for Transgourmet Fruits & Légumes. Wholesale/Production business area 43 Coop Group Annual Report 2019

Transgourmet Österreich

Factsheet

Austria • Introduction of Click&Carry: order via the online store or app, two hours later the products have all been picked and packed and are ready for collection from the saved location, at the requested time • Re-certification to ISO 14001 • Switch from styrofoam trays to FSC-certified cardboard trays for fruit and vegetables • Ongoing rollout of sustainable wheeled container covers, switch made at Villach site in October 2019 • Environment and energy training for all employees

Specialists • Takeover of Gastro Profi GmbH, specialist in ethnic catering • Former “mein c+c stores” integrated into the Transgourmet Österreich umbrella brand as “Transgourmet Cash & Carry”, with bigger range

Wholesale/Production business area 44 Coop Group Annual Report 2019

Transgourmet Switzerland

Factsheet

Switzerland • Takeover of Emmi Frisch-Service AG, broadening expertise in sales and logistics • Sales growth in wholesale supplies: Transgourmet gains market shares, strong growth in customers and regional ranges • Opening of Prodega store in Kriens, and commissioning of the eighth Transgourmet regional warehouse: greater logistics capacity, shorter delivery distances in central Switzerland • Wholesale supplies reports greatly increased sales of own-label brands Econo- my, Quality and Premium • Range of own-label sustainability brand Origine expanded, with lots of new products across all product groups • Cook prestige brand reports big increase in sales to specific customer group • Launch of live cooking in French-speaking Prodega stores as well (chefs from the culinary centre of excellence cook using Transgourmet products)

Specialists • Frischeparadies opens in Basel and Zurich, with broader fresh fish expertise, and fresh fish specialists Polar Comestibles and Braschler’s Comestibles successfully integrated.

Wholesale/Production business area 45 Coop Group Annual Report 2019

Production

The Coop Group also includes numerous manufacturing companies, chief among them the Bell Food Group, in which Coop is a majority shareholder. The Bell Food Group, which is one of the leading companies in meat processing and the production of convenience products in Europe, gives Coop a strong international presence.

Net sales of the Coop Cooperative Production segment grew to CHF 815 million in 2019. Added to this are net sales for the Bell Food Group, which increased to CHF 4 billion. Total sales of sustainable ranges in Production came Over 6.7% to around 1.32 billion francs in 2019. Coop therefore increased its sales of sustainable products in the produc- more sales from sustainable tion area by 6.79% year on year. products in Production

Bell Food Group

The 2019 financial year saw big rises in raw material prices for pork in Europe, the organizational restructuring of Bell Germany, the commissioning of Europe’s most modern convenience factory in Marchtrenk in Austria, and a good business performance in Switzerland in the second half of the year.

Increase in raw material prices for pork African swine fever and the associated shortage of raw materials, coupled with the trade disputes between the USA and China, pushed up raw material prices for pork in Europe by more than 40% in 2019. Negotiations to enforce price increases were quickly ushered in, but were only partially successful. This development had a significant impact on the result in the Bell International business area.

Abandonment of German sausage business Organizational changes were made in the Bell Germany Division in 2019. At the end of June, the Bell Food Group announced that it was quitting the German sausage business. The factories in Suhl and in Börger have been sold, in a transfer of undertakings. By the end of the year, the factory in Bad Wünnen- berg had been converted to a manufacturing facility for fresh convenience products. Going forward, Bell Germany will be focusing on, and expanding its strong position on the cured ham market.

New manufacturing facility for Serrano ham in Spain The new manufacturing facility for Serrano ham, near Madrid, was opened in the first half of 2019 at the Spanish national subsidiary, which, for organizational purposes, belongs to Bell Germany. Together with the two existing factories, the company is now ideally placed in the growing market for Spanish char- cuterie.

The convenience market continues to grow The Convenience business area is making good headway, as the convenience market continues to grow. Ultra-fresh and ready-to-eat products in particular are experiencing very high rates of growth. In Marchtrenk, the Bell Food Group has opened a state-of-the-art production facility where, for the first time, fresh and ultra-fresh convenience products by Bell, Eisberg and Hilcona are manufactured under one roof for the German and Austrian market. The new production facility was opened in spring 2019 and was commissioned in stages. Wholesale/Production business area 46 Coop Group Annual Report 2019

Highlights from the Bell Food Group The table below lists highlights from the year under review at Bell Food Group AG. For more information about the Bell Food Group, please refer to the factsheet below and visit www.bellfoodgroup.com.

Bell Food Group AG

Factsheet

Bell Switzerland business area • Bell Switzerland celebrated its 150th anniversary in 2019. The product line launched especially to mark this, “Samuel Bell 1869”, developed very well in 2019. • After a difficult financial year in 2018 and a poor start to the year, the situation at Bell Switzerland eased in the second half of 2019. • Virtually all of the business units were instrumental in the improved business performance, with the areas of poultry and seafood doing particularly well.

Bell International business area • The raw material situation for pork remained strained in 2019. • The sale of the sausage business in Germany, along with the repurposing of the Bad Wünnenberg production facility, significantly dented sales at Bell Germany. • In Fuensalida, near Madrid, a new manufacturing facility with annual capacity of around one million Serrano hams was opened. • The positive trend at Hubers continues. Sales in Austria rose thanks to the acquisition of new customers; sales of organic products and sustainable specialities such as corn-fed chicken performed particularly well. • The national subsidiaries in Poland and Hungary developed well and reaped the benefits of their ongoing volume strategy.

Convenience business area • With a shortage of specialists in catering, novel food solution concepts will come to the fore. The Bell Food Group wants to play a leading role in this trend, and is investing in new production technologies for customer-specific food service solutions. • A hot, dry summer made for difficulties sourcing raw materials for salads and vegetables from Europe. • Despite the Swiss market being somewhat saturated, Eisberg had a good year in 2019, thanks to innovative products and strong rates of growth in Eastern Europe. The trend for high-convenience product concepts (salad bowls, FÜR BESSERESSER. shakers) continues. • Hilcona achieved further growth in 2019. The new manufacturing facility for the German market was opened in Bad Wünnenberg in December 2019. With the launch of the Green Mountain burger, Hilcona made its first and successful foray into the booming meatless burger market in 2019. • Hügli posted good sales in the food service business in 2019 and is benefiting to a greater extent from synergy effects within the Group. At year-end, for instance, Hügli took over spice filling from Coop’s own manufacturing company Sunray. The trend towards fresh and liquid products continues. Wholesale/Production business area 47 Coop Group Annual Report 2019

Coop’s manufacturing companies

Chocolats Halba trains cocoa farmers in Ghana In 2019, Chocolats Halba initiated the Sankofa project which, for the first time, combines cocoa growing around the world, using dynamic agroforestry methods, with CO2 offsetting to the Gold standard. On the agroforestry plots, the farmers plant trees which store greenhouse gases while at the same time providing shade, nutrients and water for the cocoa. By 2023, Coop will offset around 75 000 tonnes of CO2 through this project. Chocolats Halba and Coop are contributing heavily to the Sankofa project. They are training 2 900 farmers and showing them how to switch from monocultures to mixed planting, securing their livelihood for the long term. Around 400 hec- tares of land are managed according to dynamic agroforestry principles. The cocoa grows almost as it would in a rainforest, with a multitude of oth- Around 75 000 tonnes er plants such as maize, mango and mahogany trees. This boosts soil fertility and biodiversity of CO2 offset in Ghana and, thanks to the mixed crops, the farmers enjoy higher cocoa yields and additional income.

Reismühle Brunnen/Nutrex committed to sustainable sourcing When sourcing its goods, Reismühle Brunnen/Nutrex takes account not only of economic but also social, ethical and environmental aspects. In 2019, the India and Thailand projects educated and trained 453 farmers in laser levelling, teaching them the skills to measure out and level their fields using a laser, so that the fields can then be planted to the same height everywhere. This means that less of the scarce water is needed to irrigate the fields. Thanks to this water-efficient technique, Reismühle Brunnen/Nu- trex ensures that – except during monsoon season – farmers need 42% less water per kg of rice, leaving enough water available for all farmers. In 2019, Reismühle Brunnen/Nutrex decided to switch from IBC containers for vinegar packaging, to folding containers with an inner liner. As the folding containers are not only reusable, but can also be folded and stacked after use, they take up less space during transport and in the customer’s warehouse. This has advantages in terms of sustainability.

Coop bakeries investing in Ticino In 2019, Coop invested in the bakery in Castione, where panettone and wood-fired loaves are produced for Coop sales outlets. A special baking line with cutting-edge technology has been built for panettone production, and Coop has installed three wood-fired ovens, each with six baking chambers, for wood- fired bread. The products will go on sale in March 2020.

Highlights from Coop’s manufacturing companies The table below lists the highlights during the year under review, along with a factsheet on the individual Coop manufacturing companies. Additional information can be found at www.coop.ch/produktion.

Flours, flour mix- • Increase in production output to over 210 000 tonnes, tures, durum wheat meaning further expansion of market shares in cereals for semolina, polenta, human consumption processed in Switzerland oat flakes, extruder • Successful tandem with Hilcona and Transgourmet products • Systematic diversification of the range and completion of process optimization measures in the oat and spelt segment • 2nd extruder system successfully commissioned, with launch of new products (fillers and additives) • Complex renovation work on silo 1924 on track • As required by private law, raw material prices successfully Factsheet adjusted for export customers Wholesale/Production business area 48 Coop Group Annual Report 2019

Chocolate bars, • Sales growth of more than 20% in chocolate exports; confectionery, festive successful market entry in China with premium, sugar-free assortments, chocolate chocolate for indus- • Market share gains in Switzerland in organic/fair trade trial purposes products; Madagascar added as a country of origin for Coop’s successful project chocolates Dried fruit, nuts, • Increase in direct and certified sourcing of raw materials seeds, dried mush- from countries of origin rooms and vegeta- • Start of a world-first project for sustainable cocoa cultivation bles, pulses, sugar, and carbon offsetting in Ghana

edible oils, baking • Completely CO2-neutral production; use of over 90% renewa- and dessert products ble energies; around 133 trees planted daily for carbon Factsheet offsetting

Cosmetics, deter- • Sales growth of more than 2% in all customer segments, in gents and cleaning Switzerland and abroad products, hygiene • Lead with sustainable ranges increased, sales of sustainable products products up by 11% in all customer segments • Six new aha-certified Naturaline Sensitive products brought onto the market • PET bottles for Oecoplan detergents switched to 100% recycled PET • App-controlled dispensing technology for professional dishwashing successfully introduced at a large number of customers • Halal certification obtained, prerequisite for markets in Factsheet Southeast Asia

Coop Fresh bread products • Panettone: new process line, new recipes, new packaging bakeries (loaves, rolls, braided design bread), frozen bread • New wood-fired oven line installed at Castione site products, cakes and • Fresh dough extended to 41 sales outlets biscuits, tarts and • Commercial doughs: new recipes and new packaging pastries, and com- • Further automation continues to be introduced Factsheet mercial doughs • IFS certification for Schafisheim Bakery

Organic and fair- • Positive growth of over 25% in the industrial segment in trade rice, rice Switzerland specialities and • In exports with SC Swiss, sustainable increase with new rice blends customers in retail and online business and with specialities at Transgourmet Österreich and Transgourmet France Vinegar and vinegar • Two new Fine Food rice products brought onto the market; specialities Sushi Koschihikari from Japan and Sadri rice from Iran • Substantial 25% increase in organic vinegar, to 30% of total volume • Awarded the “Chapeau” prize for social commitment, for efforts to reintegrate recipients of invalidity benefits into the Factsheet job market

Mineral water and • Sugar reduced by 10% in all soft drinks sugar-containing • Launch of flavoured water 1l and mint water 0.5l with pleas- soft drinks ing volume growth • Lemon-flavoured water 0.5l a big success, with market growth • Higher sales volumes for Aquina at Transgourmet • Planning permission obtained for exploratory drilling on the Coop site; preparations underway to open up more sources • Reduction in packaging materials for shrink wrap, labels and Factsheet some preforms Wholesale/Production business area 49 Coop Group Annual Report 2019

Cave White wines, rosé • Substantial increase in sales of wines vinified in-house and wines, red wines, increase in overall output dessert wines, • Expansion of product portfolio at Transgourmet Switzerland, sparkling wines more articles listed • Successful range of Trophy wines for spring/summer, as well as autumn/winter • Manufacture of sparkling wines expanded • Special edition created for “Swiss International Air Lines” to Factsheet coincide with “La Fête des Vignerons 2019”

Banana Bananas, exotic fruit • Two robots to boost efficiency replaced ripening plant such as pineapple • All processes switched to international standard carton and kiwi, dried fruit Factsheet Employees 50 Coop Group Annual Report 2019

Employees

Attractiveness as an employer 51 CPV/CAP Coop Pension Fund performs well 51 Employer awards for Coop and Transgourmet France 52

Training and staff development 52 Investment in training and professional development 52 Success for apprentices 52 Preliminary integration apprenticeships successfully completed 52 Coop Campus: new Coop Management and Leadership CAS gets underway 52 Coop Campus basic training in the offing 53 Digital recruiting and introduction of SuccessFactors 53 Managing director exchange between Edeka and Coop 53 Subsidiaries benefit from resilience courses 53 Employees 51 Coop Group Annual Report 2019

Employees

Coop is using digital solutions to make recruiting more efficient, and relies on a combination of digital learning content and practical experience in its training programme. The Management and Leadership CAS is the first time Coop has offered certified management training to university of applied sciences standard.

In 2019, the Coop Group had a total workforce of 90 307 in the Retail and Wholesale/Production business areas, including 3 455 apprentices. In the year under review, 62.7% of jobs were in Switzerland and the remainder abroad. Coop plays an important integrative role in society, by employing people of all educational levels and nationalities.

The latest developments on the labour market make sustainable HR work a challenging task. Chief among those developments are the skills shortage, growing competition for qualified employees and rapid technological advances. Demographic change, 90 307 particularly with regard to the low birth rate generations and the employees of retirement of baby boomers, also requires companies to be highly adaptable. Professional activity is far more significant the Coop Group among women, the world of work is becoming increasingly multicultural, and working models are becoming more flexible. In this environment, the Coop Group positions itself as a diverse, attractive and sustainable employer. This is particularly important in order to attract and then retain the best qualified job-seekers as employees.

In its HR work, the Coop Group pursues the following strategic priorities: attractiveness as an employer, entrepreneurship and management, and change management. One of the main aims of Coop’s HR work, besides recruiting new staff members, is to enthuse employees for and impart to them the skills they need in order to deal with technological change and digitalization.

Attractiveness as an employer

CPV/CAP Coop Pension Fund performs well Despite the still very difficult environment, the CPV/CAP Coop Pension Fund achieved a very satisfacto- ry return of 9.1%. As at 31 December 2019, it had a funding ratio of 116%. The target of 115% was reached, and funds were built up.

Due to this pleasing result, the old-age pension assets of active members accrued interest of 2% in 2019. This is twice the level of the minimum interest rate under Swiss law. The provisional interest rate for 2020 is 2%. Pensions remained unchanged, and this will also be the case in 2020. However, pensioners will receive a one-off special payment of 500 francs in May 2020. At 37 266, the number of active members was slightly higher than the previous year (37 181 members). The number of pensioners rose by 346 people to 20 488 at the end of 2019. Employees 52 Coop Group Annual Report 2019

Employer awards for Coop and Transgourmet France Many years of systematic investment in staff development earned Coop Bilan magazine’s “Prix des Meilleurs Employeurs” in the “grandes entreprises” category for the second time in succession in 2019. The French edition of the magazine “Capital” chose Transgourmet France as one of France’s best employers in 2019. In the “Wholesale” category, Transgourmet ranked 11th on the list of best employers in 2019. The ranking is derived from a survey conducted by an independent survey institute, for which the institute surveyed 20 000 people at companies across France with more than 500 employees.

Training and staff development

Investment in training and professional development Employees attended around 4 200 internal professional development events in 2019, to build on their expertise and knowledge. This equates to more than 422 000 hours of training. They spent at least as many hours learning at the workplace, via e-learning, instruction or on the job training. Coop again invested around 45 million francs in this, providing a wide range of opportunities through some 350 internal courses. Approximately 65 000 e-learning courses were completed on subjects including protection of young people, occupational safety, hygiene, fire safety and the cold chain. Furthermore, Coop alloca- ted around 3.8 million francs of funding for external training courses outside the Coop Campus, enabling employees to obtain a wide array of qualifications. These include retail manager, advanced food technology diplomas and business ethics officer with CAS.

Success for apprentices In 2019, 98.6% of apprentices across the whole Coop Group passed their final exams. Coop business units were therefore able to offer jobs to a total of 69.7% of graduate apprentices. Interest in Coop as a provider of apprenticeships also remains unabated: within the Coop Group, as of 1 August 2019 a total of 1 083 apprenticeships were filled. Coop offers a total of 3 505 apprenticeships each year, in 32 pro- fessions. There are careers on offer in sales, logistics, administration, catering, production and transportation. 2 000 trainers and 30 full-time helpers assist and support apprentices, making Coop the second-largest apprenticeship provider in Switzerland.

Preliminary integration apprenticeships successfully completed At the start of the 2019 apprenticeship year, another 40 or so young people began their preliminary integration apprenticeships at Coop. These apprenticeships enable young refugees to get a foothold on the Swiss job market. By August 2018, around 30 young people had started this one-year preliminary apprenticeship at Coop. Of the participants, in August 2019 just under 70% were able to start a two or three-year apprenticeship. A high degree of motivation, marked linguistic progress, the desire to integrate and enthusiasm for the profession were key factors in successfully transitioning to the conventional apprenticeship.

Coop Campus: new Coop Management and Leadership CAS gets underway Following a complete overhaul of the content and methods, in 2019 Coop relaunched its management training programme in sales. A total of around 33 course days on four levels were redesigned and the course profile was fine-tuned for the target groups. As well as sales executives, managers in the areas of logistics and catering can also take advantage of the more modern course design, electronic learning platforms and new course settings according to the “Management and Leadership” philosophy. Among other things, in the summer of 2019, a course commenced which trains employees to the level of a Certificate of Advanced Studies (CAS) from a university of applied sciences. Employees 53 Coop Group Annual Report 2019

Coop Campus basic training in the offing To better meet the requirements of retail, in 2019 Coop began thoroughly modernizing its retail specialist training. From August 2020, Coop will be making learning content available for the Coop Campus basic training in electronic format. Furthermore, up to twelve apprentices at a time will receive an in- depth and highly relevant introduction to their new profession at large, basic sales outlets. In future, from their second year onwards, apprentices will be professionally equipped to independently take on tasks in smaller Coop sales outlets.

Digital recruiting and introduction of SuccessFactors Having centralized reference writing, job advertisements and pre-selection at the Shared Service Centre (SSC) in 2018, in the year under review Coop introduced the new SAP system “SuccessFactors”. When a vacancy arises, the team at the SSC that deals with central job advertising and pre-selection can use the software to publish an advert on pre-specified channels.

In the future, the software will handle other steps, such as induction of new employees, training, employee interviews, target/performance interviews, remuneration and succession planning as well as personnel management. Moreover, it will also be possible in future to edit staff duties on mobile devices.

In the year under review, Coop also engaged external service providers to help it make changes to its employer branding, and introduced active sourcing. This is a process whereby Coop uses social media, such as LinkedIn and Xing, to search for and contact suitable candidates. By so doing, it can increase the applicant pool for jobs which are difficult to fill because of their particular profile. Coop now also actively posts current news, videos and images on social media and career sites.

Managing director exchange between Edeka and Coop In 2019, Coop and Edeka exchanged managing directors. Ten selected managing directors at Coop were able to spend a week visiting store/market managers at the purchasing alliance partner in Germany. The visits were an opportunity for the people involved to discuss sales-related topics, resource management questions and share ideas about the presentation of merchandise. The exchange will take place again this year.

Subsidiaries benefit from resilience courses Since 2017, Coop has successfully run around 70 management-level seminars on the subject of resilience. Coop will also be offering the courses at subsidiaries Transgourmet and Coop Mineralöl AG and at the Bell Food Group from now on. A trial took place in June 2018 with managers at the subsidiaries. Over a two-day seminar, participants learned the seven pillars of resilience and methods of emotional regulation. Coop plans to stage around 30 seminars for executives at Transgourmet, Bell Food Group and Coop Mineraloel AG in 2020 and 2021. Employees 54 Coop Group Annual Report 2019 Corporate governance 55 Coop Group Annual Report 2019

Corporate governance

Group structure 56

Capital structure 57

Board of Directors 58 Members of the Board of Directors 58 Education/training, professional activities and vested interests 58 Election and term of office of the Board of Directors 62 Internal organization 62 Allocation of tasks within the Board of Directors 62 Regulation of responsibilities 62 Instruments of information and control over the Executive Committee 63

Executive Committee 64 Members of the Executive Committee 64 Education/training, professional activities and vested interests 64 Management agreements 67

Compensation 68

Rights of participation 68

Changes of control and defensive measures 68

Auditors 69

Information policy 69

Coop Group management 70 Coop Cooperative 70 Other subsidiaries 72 Corporate governance 56 Coop Group Annual Report 2019

Corporate governance

Corporate governance is based on the principle of management’s transparency and openness towards employees and the general public. In the following chapter, Coop provides an insight into its company structure.

The Coop Group Cooperative is committed to openness and transparency in the operational management of the Group and it acts to ensure good corporate governance in the interests of its members, customers, employees and other stakeholders. Its governance largely follows the guidelines of SIX Swiss Exchange regarding information on corporate governance. These apply to joint-stock companies and companies that have issued participation certificates or non-voting dividend rights certificates, which does not apply to Coop as a cooperative society. The only company in the Coop Group that has issued SIX-listed equities is Bell Food Group AG. For specific information on this company’s corporate governance, see its annual report and website, www.bellfoodgroup.com.

Group structure

The Coop Group Cooperative is based in Basel. At the end of 2019 the cooperative had over 2.5 million members. Any resident of Switzerland or the Principality of Liechtenstein can become a member. The Coop Group Cooperative holds stakes in a number of companies in Switzerland and abroad. Pages 110–113 of the Annual Report (Scope of consolidation) provide information on the group structure. There are no cross-holdings within the Coop Group. The Coop Group Cooperative is responsible for the general direction of business of the Coop Group. The executive bodies of the Coop Group Coop- erative are the Regional Councils, Delegate Assembly, Board of Directors, Executive Committee and auditors.

Organization

2 536 702 MEMBERS

REGIONAL COUNCILS Suisse Romande Nordwestschweiz Ostschweiz incl. FL Bern Zentralschweiz-Zürich Ticino

DELEGATE ASSEMBLY

Auditors

COOP GROUP COOPERATIVE BOARD OF DIRECTORS

COOP GROUP COOPERATIVE EXECUTIVE COMMITTEE Corporate governance 57 Coop Group Annual Report 2019

Regional Councils The Coop Group Cooperative comprises six regions (Suisse Romande, Bern, Nordwestschweiz, Zen- tralschweiz-Zurich, Ostschweiz incl. Principality of Liechtenstein, and Ticino). These regions do not constitute separate legal entities, but are part of the Coop Group’s cooperative-based organizational structure. In each region, cooperative members elect a Regional Council consisting of 60 to 120 members (Ticino: maximum of 30). The Regional Councils maintain contact with members and the public. Each Regional Council appoints a Committee of twelve (Ticino: six) from among its members. Each Commit- tee is self-constituting and submits a proposal to the Board of Directors for the attention of the Delegate Assembly for one of its members to be appointed to the Board of Directors; if elected, the member becomes President of both the Regional Council (RC) and its Committee (RCC). The other members of the Regional Council Committee are the delegates. They represent the members of the corresponding region at the Delegate Assembly of the Coop Group Cooperative. The current composition of the Delegate Assembly is shown in the section “Delegate Assembly”.

The term of office of the Regional Councils and the Regional Council Committees is four years. The current term of office is from 2017 to 2021. According to the Articles of Association, a member’s term in office is limited to 20 years, and members must retire at the end of the year in which they turn 65. Start- ing from the 2021 to 2025 term of office, the age restriction will be raised to age 70.

Delegate Assembly The Delegate Assembly is endowed with the legal powers vested in the Annual General Meeting and the duties assigned to it in the Articles of Association. In particular, it is responsible for laying down the Articles of Association, electing and dismissing the Board of Directors and the statutory auditors, ap- proving the Annual Report, discharging the Board of Directors and dissolving the cooperative society. In addition, the Board of Directors can submit other business to it for a decision.

Further information on the Regional Councils and the Delegate Assembly can be found in the Articles of Association and the Election Regulations of the Coop Group Cooperative. Both documents can be ac- cessed online. www.coop.ch/organe

As at 31 December 2019, the Delegate Assembly consisted of the following delegates: Suisse Romande region Bern region Nordwestschweiz region Zentralschweiz-Zürich Ostschweiz region (incl. Ticino region Liechtenstein) region Vincent Albasini Sabine Boschung Alexandra Abbt-Mock Silvia Banfi Frost Suzanne Blaser Lucia Gianoli Patrick Csikos Patrick Bruni Sibylle Bader Biland Stefan Baumann Fridolin Eberle Carlo Frigerio Yvan Délèze Chantal Gagnebin Evelyn Borer Beatrice Bertschinger Markus Eugster Fiorenzo Robbiani Olivier Grangier Sandra Ghisoni Schenk André Dalla Vecchia Kilian D’Alberto Christa Flückiger Gabriella Rossetti Doris Grobéty Fränzi Grunder Sandra Nicole Engeler Anna Maria Forlano Michael Fuhrer Raffaele Sartori Nicole Hosseini Jürg Kradolfer Adrian Fankhauser Alexander Gossauer Kurt Gansner Nadine von Büren-Maier Corinne Lehmann Susanne Jäger Ronald Hauser Roberto Godenzi Zohra Ottoz Sibylle Miescher Peter Jossi Evelyn Hofer Hedwig Kohler Benoît Santschi Felix Truffer Pascal Konrad Cornelia Luchsinger Richard Kübler Catherine Stern Annette Wisler Albrecht Daniel Münger Alex Rutz Leonardo Longaretti Marc Vauthey Zippora Wüthrich Heidi Straumann Beda Schlumpf Gabi Senn

Capital structure

The capital structure of the Coop Group can be seen in the consolidated balance sheet (page 89) and the corresponding notes (pages 92–97). The equity of the Coop Group Cooperative consists exclusively of self-generated funds. The members have no stake in the equity. Corporate governance 58 Coop Group Annual Report 2019

Board of Directors Members of the Board of Directors

According to the Articles of Association, the Board of Directors of the Coop Group Cooperative comprises a maximum of six members nominated by the regions as well as a maximum of five further members, including a representative from the French-speaking part of Switzerland and an employee representative. The members of the Board of Directors are proposed by the Board of Directors and elected by the Delegate Assembly. The Board of Directors currently includes four further members, i.e. it has a total of ten members. With the exception of the employee representative, the members of the Board of Directors may not be employed by Coop or by any enterprise controlled by Coop (strict division of powers).

As at 31 December 2019, the Board of Directors of the Coop Group Cooperative comprised the following members: Name Year of Current function First year of office Elected until birth Hansueli Loosli 2 1955 Chairman 2011 2021 Peter Eisenhut 1955 Member, representative of Ostschweiz/FL Region 2009 2021 Michela Ferrari-Testa 1963 Member, representative of Ticino Region 2006 2021 Susanne Giger 1970 Member, representative of Zentralschweiz-Zürich Region 2018 2021 Petra Jörg Perrin 1964 Member, representative of Bern Region 2017 2021 Hans-Jürg Käser 1956 Member, employee representative 2009 2021 Irene Kaufmann 1 1955 Vice-Chairwoman 2001 2021 Roman Kuhn 1955 Member, representative of Nordwestschweiz Region 2010 2021 Doris Leuthard2 1963 Member 2019 2021 Bernard Rüeger 1958 Member, representative of Suisse Romande Region 2009 2021

1 Chairwoman of the Audit Committee 2 Member of the Audit Committee

Education/training, professional activities and vested interests (Reference date 31.12.2019)

The Board of Directors of the Coop Group Cooperative is also the Board of Directors of the Coop Coop- erative and Coop Immobilien AG.

Hansueli Loosli Swiss Education: Swiss diploma in accounting and controlling, KV Zurich Professional experience: 1982–1985 Controller, Dep. Director of Movenpick Produktions AG, Adliswil; 1985–1992 Waro AG, Volketswil, latterly as Managing Director; 1992–1996 Purchasing Director Non-Food at Coop Switzerland, Wan- gen; 1992–1997 Managing Director of Coop Zurich, Zurich; 1997–2000 Chairman of the Executive Committee and of the Group Executive Board of Coop Switzerland, Basel; January 2001–August 2011 Chairman of the Executive Committee of the Coop Cooperative, Basel; since September 2011, Chairman of the Board of Directors of the Coop Group Cooperative, Basel Further directorships: Bell Food Group AG, Basel (Chairman); Coop Mineraloel AG, Allschwil (Chairman); Swisscom AG, Ittigen (Chairman); Transgourmet Holding AG, Basel (Chairman) Other functions and offices: Advisory Board, Deichmann SE Corporate governance 59 Coop Group Annual Report 2019

Peter Eisenhut Swiss Education: Lic. oec. HSG, University of St. Gallen Professional experience: 1981–1991 Principal teacher of economic studies, Cantonal School, Heerbrugg; 1987–1998 Lecturer in economics, University of St. Gallen; 1990–1993 Member of Executive Committee, St. Gallen Center for Futures Research; 1993–1996 Independent economic advisor; 1997–2007 Chief Economist, IHK (Chamber of Industry & Commerce) St. Gallen-Appenzell; since 2008, Managing Partner, Ecopol AG, St. Gallen Further directorships: Rofima Holding AG, Horn; Santis-Schwebebahn AG, Schwägalp Other functions and offices: Supporters’ Association and Executive Board, Swiss Research Institute of Small Businesses and Entrepreneurship, University of St. Gallen; Zukunft. li Foundation (Chairman); Board member, Winterhilfe Appenzell-Ausser- rhoden

Michela Ferrari-Testa Swiss Education: lic. iur. University of Zurich, lawyer and notary Professional experience: since 1990, own law and notary practice in Capriasca Further directorships: avanex Versicherungen AG, Dübendorf; Helsana AG, Dübendorf; Helsana Unfall AG, Dübendorf; Helsana Versicherungen AG, Dübendorf; Helsana Zusatzversicherungen AG, Dübendorf; Progrès Versicherungen AG, Dübendorf; sansan Versicherungen AG, Dübendorf; Schweizerische Mobiliar Genossenschaft, Bern Other functions and offices: Board member, Fondation Sana

Susanne Giger Swiss Education: Lic. oec. HSG, University of St. Gallen Professional experience: 1995–1998 Project Manager B+R Event AG, Glattbrugg; 1998–2000 Head of Sponsorship and Events Zürich insurance company, Zurich; 2001–2007 Business Editor Schweizer Fernsehen und Schweizer Radio DRS, Zurich and Bern; 2008 author of books and freelance journalist; 2009–2017 Business Editor and presenter, Schweizer Radio und Fernsehen SRF, Bern and Zurich; since 2018 entrepreneur (Susanne Giger GmbH), Uetikon am See Further directorships: Board member, Kartause Ittingen, Warth-Weiningen, Board member, Zewo, Zurich Other functions and offices: member of the Board of HSG Alumni Women’s Chapter Advisor, Lassalle-Institut Corporate governance 60 Coop Group Annual Report 2019

Petra Jörg Perrin Swiss Education: Dr. rer. oec. University of Bern Professional experience: since 1989 editor, author and lecturer as well as project manager; since 2006 Managing Director and since 2015 CEO at Rochester-Bern Executive Programs Other functions and offices: Titular Professor and visiting lecturer at the University of Bern

Hans-Jürg Käser Swiss Education: Apprenticeship as an electrician Professional experience: 1980–1991 Head of Outgoing Goods, Coop Switzerland; since 1999, Head of Transport Aids Pool at Coop, Basel Other functions and offices: Coop Section of Unia; Association of Salaried Employees of Coop (Chairman)

Irene Kaufmann Swiss Education: Dr. oec. publ. University of Zurich Professional experience: 1980–2002 Auditing and consultancy mandates for private-sector enter- prises on behalf of Dr. Nabholz Treuhand AG, Zurich; 1985–2008 Nabholz Beratung, Zurich: project management consultant to public administra- tions and companies, focusing on finance and organization; 2000–2009 Vice-Chairwoman of the Board of Directors, Coop Cooperative, Basel; 2009–2011 Chairwoman of the Board of Directors, Coop Cooperative, Basel; since 2011 Vice-Chairwoman of the Board of Directors, Coop Group Cooper- ative, Basel Further directorships: Bell Food Group AG, Basel; Coop Mineraloel AG, Allschwil; Coop Aid for Mountain Regions Cooperative, Basel (Chairwoman); Dipl. Ing. Fust AG, Oberbüren; HWZ Hochschule für Wirtschaft Zürich AG, Zurich; Schweizer- ische Mobiliar Genossenschaft, Bern; Schweizerische Mobiliar Holding AG, Bern; Transgourmet Holding AG, Basel Other functions and offices: Foundation Board, CPV/CAP Coop Pension Fund (Chairwoman); Member of Foundation Board, ETH Zurich Foundation; Foundation Board, Juventus Schools, Zurich (Chairwoman) Corporate governance 61 Coop Group Annual Report 2019

Roman Kuhn Swiss Education: Executive MBA, University of Zurich Professional experience: 1980–1986 General Manager, Neumühle Alb. Kuhn & Cie in Wohlen; 1988– 1995 UBS in Zurich and Brugg; 1995–2000 Head of Private Banking Brugg at Aargauische Kantonalbank; 2000–2018, Head of Institutional Banking and Member of Senior Management, Aargauische Kantonalbank, Aarau Further directorships: Circus Monti AG, Wohlen; thecompacts GmbH, Aarau Other functions and offices: Chairman, Förderverein Schloss Hallwyl (Friends of Hallwyl Castle); Verein Melodyaarau (Chairman)

Doris Leuthard Swiss Education: lic. iur. University of Zurich, lawyer Professional experience: 1991–2006 lawyer and partner at Fricker Lawyers, Wohlen. Also member of various Boards of Directors (including Neue Aargauer Bank AG, Elek- trizitäts-Gesellschaft Laufenburg AG, Baugenossenschaft Merenschwand) and political activity as schools inspector for Muri District (1993–2000), member of the Grand Council of the Canton of Aargau (1997–2000), member of the National Council (1999–2006) and as Chairwoman of the Chris- tian Democratic Party of Switzerland (2004–2006). 2006–2018 Federal Councillor, initially as head of the Federal Department of Economic Affairs (FDEA) then, from November 2010, head of the Federal Department of Environment, Transport, Energy and Communications (DETEC), 2010 and 2017 President of the Swiss Confederation Further directorships: Bell Food Group AG, Basel; Transgourmet Holding AG, Basel Other functions and offices: Ulrico Hoepli-Stiftung (Chairwoman), Stiftung Swiss Digital Initiative (Chairwoman), Steering Committee Europa Forum (Co-Chairwoman), Foundation Board ETH Zürich Foundation

Bernard Rüeger Swiss Education: MBA, Lausanne Professional experience: since 1986 in various positions and 1992–2012 Managing Director, Rüeger SA, Crissier; 2013–2019, Chairman, Rüeger Holding SA, Paudex Further directorships: Alpsens Technologies SA, Crissier (Chairman); CSS Holding AG, Lucerne; Lyncée Tec SA, Ecublens; Precitherm SA, Paudex; Socorex Isba SA, Ecublens Other functions and offices: Economiesuisse (Vice-Chairman); Board member, Fondation de Beaulieu Corporate governance 62 Coop Group Annual Report 2019

Election and term of office of the Board of Directors

Principles of the electoral procedure The members of the Board of Directors are elected by the Delegate Assembly. The term of office for all members is four years. Re-election is possible. In accordance with the Articles of Association, a member’s term in office is limited to 20 years, and members must retire by the time of the first ordinary Delegate Assembly in the year in which they celebrate their 65th birthday.

First-time election and remaining term of office The start of the term of office for members of the Board of Directors elected for the first time is set out in the section “Members of the Board of Directors”. The current term of office began in spring 2017 and ends in spring 2021.

Internal organization

Allocation of tasks within the Board of Directors The Board of Directors is self-constituting, appointing a Chairman and a Vice-Chairman from among its members. The members assume equal responsibility for exercising the functions of the Board of Directors.

Audit Committee As support, the Board of Directors has appointed an Audit Committee from among its own members. The Audit Committee advises the Board of Directors on questions concerning the financial statements and reporting, on the activities of the internal and external auditors, the internal control system (ICS) and risk management. Compliance is also a matter for the internal control system and risk management. The Committee comprises Irene Kaufmann (Chairwoman), Hansueli Loosli and Doris Leuthard.

The Audit Committee meets at least three times a year. A meeting generally lasts half a day. As a rule, the Chairman of the Executive Committee (CEO), the Head of the Finance Business Unit and the Head of Internal Auditing take part in the meetings in an advisory capacity. Depending on the agenda of the meeting, the external auditors may be asked to attend. The members of the Board of Directors are kept informed on the work of the Audit Committee at regular intervals. Internal Auditing reports to the Chair- woman of the Audit Committee. The Audit Committee met four times in 2019.

Working method of the Board of Directors The Board of Directors meets as often as business requires, but at least four times a year. As a rule, the Chairman of the Executive Committee (CEO) and the Vice-Chairman of the Executive Committee take part (for all items on the agenda) in the meetings of the Board of Directors in an advisory capacity, as do the other members of the Executive Committee if required. The Board is quorate if a majority of its members are present. A valid decision requires a majority of the votes cast. In the event of a tie, the Chairman of the Board of Directors has the casting vote.

In 2019, the Board of Directors convened for seven meetings lasting from one to two days. Furthermore, the Board of Directors spent four days visiting locations of subsidiaries in Switzerland and abroad. No external consultants were engaged.

Regulation of responsibilities

The Board of Directors is responsible for the general direction (strategic leadership) of the business of the Coop Group Cooperative and the Coop Group and oversees operational management of the Group. The duties and powers vested in it under Art. 29 of the Articles of Association correspond to the regulations laid down for joint-stock companies (Swiss Code of Obligations 716a), which are stricter than Swiss law on cooperatives. The organizational regulations enacted by the Board of Directors provide for a strict division of responsibilities between the Board of Directors and the Executive Committee in all fundamental matters such as finance, corporate strategy, human resources and organization. The Ex- ecutive Committee has drawn up regulations that define in detail the operational responsibilities of the individual management levels. Corporate governance 63 Coop Group Annual Report 2019

Instruments of information and control over the Executive Committee

Management information system The Chairman of the Board of Directors and the CEO meet once or twice a month to discuss fundamental issues regarding the Coop Group. The Chairman of the Board of Directors regularly attends the meetings of the Executive Committee. At each regular meeting of the Board of Directors, the CEO informs the Board members in detail about the company’s performance, key projects and events as well as measures that have been implemented. Every month the Board of Directors receives a written report containing key figures on current business performance and important information on all business segments. In addition, reports and results are submitted in writing to the Board of Directors every four months and presented and discussed at the Board meetings.

Planning and goal-setting process/balanced scorecard Coop has a comprehensive and continuous planning and goal-setting process in place, which also fea- tures regular reporting to the Board of Directors, including balanced scorecard reports.

Risk management The Coop Group operates a standardized risk management system. Every three years (most recently in 2018), the Executive Committee and the Board of Directors identify and analyse the main risks and main risk scenarios and determine the appropriate measures. The progress made in implementing the individual measures is reviewed each year. Major risks are defined as those that can have a negative impact on the EBIT of the Coop Group to the extent of over 15 million francs within three years.

Internal control system During the well-established annual quality evaluation of the internal control system at business process level, operational risks and risks associated with financial reporting and compliance are assessed. The effectiveness of the checks carried out to cover these risks is also assessed. General IT checks are included in the above assessments.

The quality of the Group-wide checks is examined by members of the Executive Committee every two years. As scheduled, an assessment of the Group-wide checks was carried out in 2019. The results of the internal control system evaluations are summarized in a comprehensive report issued each year.

Internal Auditing Internal Auditing – as an independent and impartial body – is mandated by the Board of Directors and the Audit Committee to check compliance with guidelines and regulations, the appropriateness and effectiveness of the internal control system and other aspects. It audits, or advises on, the development of new business processes or changes to existing ones, and supports the Executive Committee in the achievement of its goals by presenting proposals for improving business processes. Internal Auditing practises a risk-oriented approach to auditing. Observations from audits are communicated in writing to the Chairwoman of the Audit Committee, the Chairman of the Board of Directors and the Chairman of the Executive Committee. The implementation of measures is monitored promptly. Internal Auditing coordinates its auditing activities and maintains close contact with the statutory auditors for the purpose of sharing information. It is a member of the Institute of Internal Auditing Switzerland (IIAS).

Compliance Coop’s corporate profile takes shape with the newly introduced Coop Group Code of Conduct. The Code of Conduct, which is binding on the company’s employees, describes the rules when dealing with each other, as well as with our customers and business partners. It focuses on a respectful, non-discrimina- tory, sincere and honest approach. This includes compliance with statutory requirements and internal guidelines. Violations of this Code of Conduct should initially be reported to line managers. In cases where this is not possible, the person reporting the violation can contact a reporting office. All information is treated as strictly confidential. Corporate governance 64 Coop Group Annual Report 2019

Executive Committee Members of the Executive Committee

For the operational management of the Group, the Board of Directors appoints an Executive Committee (EC), which acts on its own responsibility as the executive body; its duties and powers are laid down in the organizational regulations by the Board of Directors. The Executive Committee is headed by a Chair- man (CEO), who is entitled to issue directives to the other EC members.

As at 31 December 2019, the Executive Committee of the Coop Group Cooperative comprised the following members: Name Year of Current function Member since birth Joos Sutter 1964 Chairman of the Executive Committee (CEO) 2010 Reto Conrad 1966 Member 2012 Christian Coppey 1965 Member 2017 Daniel Hintermann 1970 Member 2017 Daniel Stucker 1964 Member 2011 Adrian Werren 1969 Member 2016 Philipp Wyss 1966 Vice-Chairman of the Executive Committee 2009

Education/training, professional activities and vested interests (Reference date 31.12.2019)

The Executive Committee of the Coop Group Cooperative is also the Executive Committee of the Coop Cooperative and Coop Immobilien AG.

Joos Sutter Swiss Education: Lic. oec. HSG, University of St. Gallen; Swiss diploma in. auditing, “Kammerschule” of the Schweizerische Treuhandkammer (Swiss Insti- tute of Certified Accountants and Tax Consultants), Zurich Professional experience: 1991–1996 Auditor at PricewaterhouseCoopers, Zurich; 1996–1999 Head of Finance/Personnel at Import Parfümerien AG, Zurich; 1999–2005 various positions such as Head of Finance/Service and Head of Sales at Interdiscount, Jegenstorf; 2005–2009 Head of Interdiscount Division; 2010–2011 Member of the Executive Committee of Coop Group Coopera- tive and Head of the Trading Business Unit of Coop Cooperative, Basel; since September 2011 Chairman of the Executive Committee of Coop Group Cooperative (CEO) and Head of Retail Business Unit of Coop Coop- erative, Basel Directorships: AgeCore SA, Geneva (Chairman); Transgourmet Holding AG, Basel; Two Spice AG, Zurich Other functions and offices: President of IG DHS (Swiss retailers’ organization) Corporate governance 65 Coop Group Annual Report 2019

Reto Conrad Swiss Education: Lic. oec. HSG, University of St. Gallen; Swiss diploma in. auditing, “Kammerschule” of the Schweizerische Treuhandkammer (Swiss Institute of Certified Accountants and Tax Consultants), Basel Professional experience: 1990–1992 Controller at UBS, Basel; 1992–2001 various auditing positions at PricewaterhouseCoopers in Basel and San Francisco; 2001–2005 CFO and member of the Bachem Group Corporate Executive Committee, Bubendorf; 2006–2012 CFO and member of Corporate Executive Board of Emmi Group, Lucerne; since 2012, Member of the Executive Committee of Coop Group Cooperative, Basel; 2012–2016 Head of Finance/Services Business Unit of Coop Cooperative, Basel; since May 2016, Head of IT/Production/Services Business Unit of the Coop Group Cooperative, Basel Directorships: Coop-ITS-Travel AG, Freienbach (Chairman); Coop Mineraloel AG, Allschwil; Panflor AG, Zurich; Siroop Trading AG, Basel; Société coopérative Centre de Formation du Léman, Jongny (Chairman); Update Fitness AG, Uzwil (Chairman) Other functions and offices: Board member, Coop Meeting Centre Muttenz (Chairman); Board member, CPV/CAP Coop Pension Fund, Basel

Christian Coppey Swiss Education: diploma in architecture, ETH Zurich, Advanced Master in Urban Planning ENPC Paris Professional experience: 1992–1995 Assistant Prof. D. Schnebli, ETH Zurich; 1993–2005 Project Manager Coppey & Coppey Architectes, Martigny; 2003–2006 Head of Corporate Real Estate Western Switzerland Credit Suisse, Lausanne; 2006–2016 Head of Real Estate & Shopping Management Maus Frères SA, Geneva; since 2017 Member of the Executive Committee of Coop Group Coopera- tive and Head of Property Business Unit of Coop Cooperative, Basel Directorships: Pearlwater Mineralquellen AG, Termen (Chairman); Robix AG, Baden (Chairman) Corporate governance 66 Coop Group Annual Report 2019

Daniel Hintermann Swiss Education: Lic. rer. pol. University of Bern; Swiss diploma logistics management Professional experience: 1997–2001 Consultant and Project Manager, Abegglen Management Con- sultants AG, Volketswil; 2001–2005 Head of Service Interdiscount, Jegen- storf; 2005–2010 Head of Logistics, IT and Service Interdiscount; 2010– 2016 Head of Coop Nordwestschweiz logistics region, Schafisheim; since 2017 Member of the Executive Committee of Coop Group Cooperative and Head of Logistics Business Unit of Coop Cooperative, Basel Directorships: Cargo Sous Terrain AG, Basel; Railcare AG, Harkingen (Chairman)

Daniel Stucker Swiss Education: Dipl. Ing. in business informatics, Biel Engineering College; Executive MBA, University of Zurich Professional experience: 1985–1986 Software engineer PTT, Bern; 1989–1992 Management consultant and Branch Manager Bern AF Consulting, Bern; 1992–1994 Head of Service-Center RESO, Solothurn; 1994–1999 Head of IT and Organization at UEFA, Unionof European Football Associations, Nyon; 1999–2007 Head of IT/Logistics, then Head of Finance/Services, later Head of Purchasing at Interdiscount, Jegenstorf; 2007–2011 Head of Division Import Parfumerie/ Christ Watches & Jewellery, Winterthur; since 2011, Member of Executive Committee of Coop Group Cooperative and Head of Trading Business Unit of Coop Cooperative, Basel Directorships: Coop Vitality AG, Bern (Chairman); Coop Vitality Health Care GmbH, Niederbipp (CEO); Coop Vitality Management AG, Bern (Chairman); Dipl. Ing. Fust AG, Oberbüren (Chairman); Elektronik Distribution AG, Basel (Chairman); Eurogroup Far East Ltd., Hong Kong; Nettoshop AG, St. Gallen (Chairman); RS Vertriebs AG, St. Gallen (Chairman); Service 7000 AG, Netstal; Siroop AG, Zurich; Siroop Trading AG, Basel (Chairman); The Body Shop Switzerland AG, Uster (Chairman) Corporate governance 67 Coop Group Annual Report 2019

Adrian Werren Swiss Education: Lic. rer. pol. University of Basel Professional experience: 1995–1996 Auditor, Coop Switzerland, Basel; 1997–2000 Project Manag- er Coop Switzerland, Basel; 2001–2008 Team Leader Controlling, Coop, Basel; 2009–2010 Head of Controlling, Coop, Basel; 2011–2016 Head of Controlling, Coop and Head of Business Management/Controlling, Trans- gourmet (co-responsible); since 2016 Member of Executive Committee of Coop Group Cooperative and Head of Finance Business Unit of the Coop Cooperative, Basel Directorships: Coop Vitality AG, Bern; Coop Vitality Health Care GmbH, Niederbipp; Coop Vitality Management AG, Bern; Dipl. Ing. Fust AG, Oberbüren; Marché Res- taurants Schweiz AG, Dietlikon; nettoShop AG, St. Gallen; RS Vertriebs AG, St. Gallen; Railcare AG, Härkingen; Retail Marketing Switzerland AG, Basel (Chairman); The Body Shop Switzerland AG, Uster; Transgourmet Central and Eastern Europe AG, Basel; Transgourmet Holding AG, Basel; Trans- gourmet Österreich GmbH, Traun; Transgourmet Switzerland AG, Basel

Philipp Wyss Swiss Education: Commercial apprenticeship and butcher apprenticeship Professional experience: 1990–1992 Sales Manager, Sempione Gehrig AG, Klus; 1993–1997 Senior Product Manager, Federation of Migros Cooperatives, Zurich; 1997–2003 Category Manager for Meat, Fish, Fresh Convenience at Coop, Basel; 2004–2008 Head of Fresh Produce Category Management at Coop, Basel; 2008–2009 Coop Sales Head of Zentralschweiz-Zürich Region; since 2009, Member of Executive Committee of Coop Group Cooperative, Basel; 2009–2011 Head of Retail Business Unit and Head of Zentralschweiz- Zürich Sales Region of Coop Cooperative, Basel; ince 2012, Head of Marketing/Purchasing Business Unit and deputy CEO of Coop Cooperative, Basel Directorships: AgeCore SA, Geneva; Betty Bossi AG, Zurich (Chairman); Casa del Vino SA, Zurich; Eurogroup Far East Ltd., Hong Kong (Chairman); Hilcona AG, FL-Schaan; Marché Restaurants Schweiz AG, Dietlikon (Chairman); Peter Riegger Holding AG, Zug; Transgourmet Holding AG, Basel; Two Spice AG, Zurich; Zanini Vinattieri SA, Mendrisio Other functions and offices: GfM Schweizerische Gesellschaft fur Marketing (Officer); member of the Bio Foundation board; Board member, Biore Foundation

Management agreements

There are no management agreements with third parties. Corporate governance 68 Coop Group Annual Report 2019

Compensation

Content and method of determining compensation and shareholding programmes Compensation of the members of the Board of Directors and Executive Committee of the Coop Group Cooperative is prepared by the Chairman and the Vice-Chairwoman of the Board of Directors and set by the Board of Directors.

Compensation of the activities of the Board of Directors of the Coop Group Cooperative consists of a fixed salary dependent on the function involved (chairmanship, vice-chairmanship, regional council chairmanship, membership). In addition, a variable amount is paid in the form of fees for attending meetings. The Chairman and the Vice-Chairwoman of the Board of Directors and the third member of the Audit Committee are exceptions in that they receive fixed compensation (annual lump sum).

Compensation of the members of the Executive Committee of the Coop Group Cooperative consists of a contractually agreed fixed gross salary and a variable performance-related sum (profit-sharing) paid in cash. This sum may not exceed 20% of gross salary and is determined by the degree of budget fulfilment.

Compensation for the activities of the Board of Directors of the Coop Group Cooperative, the Coop Co- operative and Coop Immobilien AG in 2019 amounted to 1.3 million francs (previous year: 1.3 million francs). The gross salaries of the Executive Committee totalled 4.2 million francs for seven full-time equivalents in 2019 (previous year: 4.1 million francs for seven full-time equivalents). The Coop Group Cooperative and the Coop Cooperative, respectively, are entitled to any fees paid to the Chairman and the Vice-Chairwoman of the Board of Directors and to members of the Executive Committee for activities performed as members of the Boards of Directors of subsidiaries.

The Chairman and the Vice-Chairwoman of the Board of Directors and the members of the Executive Committee do not enjoy special pension rights.

Rights of participation

Voting rights Members of the Coop Group Cooperative are represented by the delegates of their respective region. Voting rights in the Delegate Assembly reflect the number of Coop members in the corresponding regions.

Statutory quorums Resolutions and elections in the Delegate Assembly require an absolute majority of the valid votes cast for them to take effect.

Convening the Delegate Assembly The Board of Directors convenes the Delegate Assembly at least 20 days in advance, giving details of the matters to be discussed and the proposals of the Board of Directors. An extraordinary Delegate Assembly may be convened if so requested by at least one third of delegates.

Adding an item to the agenda Delegates can ask for a matter to be added to the agenda of the Assembly. The request must be submitted to the Board of Directors at least 45 days before an Ordinary Delegate Assembly is due to be held.

Changes of control and defensive measures

The Coop Group Cooperative has not issued any participation certificates. There are no statutory re- strictions or regulations. Corporate governance 69 Coop Group Annual Report 2019

Auditors

Duration of mandate and term of office of lead auditor As the auditors are appointed for one year, the Delegate Assembly elects the auditors each year. KPMG has been the auditor of the Coop Group Cooperative and of the consolidated financial statements of the Coop Group since 2019. Lead auditor Jürg Meisterhans has been in office since 2019.

Auditing fee The auditors billed fees totalling 3.5 million francs for fulfilment of their statutory mandate for the 2019 financial year.

Other fees For performing additional services over and above the statutory mandate, the auditors billed a total of 0.6 million francs during the 2019 financial year.

Information instruments pertaining to an external audit The Audit Committee is mandated by the Board of Directors to monitor the qualification, impartiality and performance of the external auditors and to inform the Board of Directors of the results of its assessment. It also provides the Board of Directors and the Delegate Assembly with a recommendation regarding the election or re-election of the external auditors.

The lead auditor took part in three meetings of the Audit Committee in 2019. Planning of the audit, the observations of the external auditors and the ensuing procedure adopted were discussed at these meetings. In addition, the lead auditor reports to all members of the Board of Directors once a year. The external auditors and Internal Auditing additionally discuss the methods and further development of the internal control system.

Information policy

The Coop Group Cooperative keeps its members informed through the weekly Coop Member Press and the Coop websites. In addition, members can view the Coop Annual Report on the company’s website or download it from the website. report.coop.ch

In spring and autumn, the delegates attend Delegate Assemblies at which information about ongoing business developments is provided and current topics are discussed in depth. Along with the invitation to the Spring Delegate Assembly they also receive a copy of the Annual Report of the Coop Group. The financial statements of the Coop Group Cooperative are an integral component of this annual report. In addition, they receive a written report every four months informing them of Coop’s current business performance.

The key sales figures for the previous year are announced at the beginning of each year, and the annual results conference of the Coop Group takes place in February. Regular media releases keep the public informed on other important developments within the Coop Group. www.coop.ch/medien Corporate governance 70 Coop Group Annual Report 2019

Coop Group management

Coop Cooperative As at 1 April 2020

Executive Committee (EC) Ostschweiz-Ticino (OT) Sales Region Joos Sutter, Chief Executive Officer Ivo Dietsche, Head of OT Sales Region Reto Conrad, Head of IT/Production/Services Business Unit Johannes Hummel, Head of Business Management/Controlling Christian Coppey, Head of Property Business Unit Patrick Wiler, Head of Human Resources Daniel Hintermann, Head of Logistics Business Unit Mario Colatrella (until 30.06.2020), Head of Sales Daniel Stucker, Head of Trading Business Unit Dario a Marca (as of 01.01.2020), Head of Sales TI Adrian Werren, Head of Finance Business Unit Rolf Gurtner, Head of Sales SG Ost/AI/AR/FL/GL Philipp Wyss, Head of Marketing/Purchasing Business Unit Shenasi Haziri, Head of Sales SG West/TG Sven Herzog, Head of Sales Winterthur/SH Annatina Mehli (as of 01.03.2020), Head of Sales GR CEO Business Unit Joos Sutter, Chief Executive Officer Frank Bertisch, Head of Internal Auditing Trading Business Unit Luc Pillard, Head of Human Resources Daniel Stucker, Head of Trading Business Unit Alfred Hubler, Head of General Secretariat Martin Meier, Head of Business Management/Controlling Jörg Ledermann, Head of Communication/Quality/Sustainability Claudia Aeschlimann, Head of Human Resources Antonella Catellani, Head of Total Store/Expansion

Retail Business Unit Coop City Joos Sutter, Head of Retail Business Unit Christian Staub, Head of Coop City Stefano Alberucci, Head of BE Sales Region Rita Zicola, Head of Sales Region Centre Ivo Dietsche, Head of OT Sales Region Claudia Schreen, Head of Sales Region East Philippe Huwyler, Head of Coop@home Daniel Tona, Head of Sales Region West Sissigno Murgia, Head of SR Sales Region Peter Schmid, Head of NWZZ Sales Region Coop Building & Hobby Roberto Villoria, Head of Total Store national Andreas Siegmann, Head of Building & Hobby Walter Rüegg, Head of CM/Purchasing Building & Hobby Suisse Romande Sales Region(SR) Marco Bertoli, CM Gardening/Plants Sissigno Murgia, Head of SR Sales Region Marc Rheia, CM Leisure/Sport/Decorating Stefan Silvestri, Head of Business Management/Controlling Gabriele Vassena, CM DIY/Electrical Jean-Claude Chapuisat, Head of Human Resources Dario Oemeroglu, CM Building/Interior Fittings Thierry Boudol, Head of Sales VD/FR Lukas Frey, CM Garden Hard Goods Claudio Marra, Head of Sales GE Bertrand Pasteur, Head of Sales VD/GE Interdiscount/Microspot.ch Jean-Luc Peulet, Head of Sales VS/VD Pierre Wenger, Head of Interdiscount/Microspot.ch Division Laurent Voelin, Head of Sales NE/JU/BE Vito Armetta, Head of Sales Frederik Heller, Head of Sales VD/FR/NE Martin Koncilja, Head of Marketing Peter Späni, Head of CM/Purchasing Bern Sales Region (BE) Ingo Arnold, Head of CM Non Food Stefano Alberucci, Head of BE Sales Region Georg Weinhofer, Head of Marketplace/Logistics/Services Peter Jacobian, Head of Sales Bern/Burgdorf Marc Zesiger, Head of IT Philippe Ziörjen, Head of Sales Seeland/FR Oliver Hasler, Head of Sales Emmental/Thun Livique/ Lumimart Marcel Maurer, Head of Sales Berner Oberland/Wallis Oliver Roth, Head of Livique/Lumimart Division Willy Kuhn, Head of Sales SO/Oberaargau Bruno Piller, Head of Human Resources Import Parfumerie André Wenger, Head of Business Management/Controlling Michael Susta, Head of Import Parfumerie Division Roland Frefel, Head of CCM Christ Watches & Jewellery Nordwestschweiz-Zentralschweiz-Zürich Sales Region (NWZZ) Vacant Peter Schmid, Head of NWZZ Sales Region Dominique Vela, Head of Business Management/Controlling Coop Vitality AG André Aerne, Head of Sales Lake Zurich North Daniel Stucker, Chairman of the Board of Directors Urs Barmettler, Head of Sales ZG/SZ Virginie Emmanuelle Pache Jeschka, Head of Coop Vitality AG Christian Rüttimann, Head of Sales AG West/Olten Marc Ellena, Head of Sales Lake Zurich South Dipl. Ing. Fust AG Martin Fürst, Head of Sales AG Ost Daniel Stucker, Chairman of the Board of Directors Sandro Janko, Head of Sales BL and surrounding area Thomas Giger, Head of Dipl. Ing. Fust AG Herbert Müller, Head of Sales LU Marc Haselbach, Head of Retail Sales Isabelle Moesch, Head of Human Resources Silvio Cioffi, Head of Novacasa General Contractor Division Jean-Claude Prosdocimo, Head of Sales Zürich Nord Giovanni De Mieri, Head of Multimedia Division Besim Ramadani, Head of Sales Zurich City Peter Fankhauser, Head of Finance & Services Christine Keller, Head of Sales BS and surrounding area Susanne Benz, Head of Electronics Division Manfred Spiller, Head of Kitchen/Bathroom Division Corporate governance 71 Coop Group Annual Report 2019

RS Vertriebs AG Alifresca AG Daniel Stucker, Chairman of the Board of Directors Philipp Wyss, Chairman of the Board of Directors Peter Rothenbühler, Head of RS Vertriebs AG Vladimir Cob, Managing Director Mauro Manacchini, Project Manager The Body Shop Switzerland AG Daniel Stucker, Chairman of the Board of Directors Eurogroup Far East Ltd. Adrian Känel, Head of The Body Shop Switzerland AG Philipp Wyss, Chairman of the Board of Directors Peter Hauser, Managing Director

Marketing/Purchasing Business Unit Philipp Wyss, Head of Marketing/Purchasing Business Unit Logistics Business Unit Daniel Hintermann, Head of Logistics Business Unit and Catering Head of BE Logistics Region Kaspar Wittwer, Head of Coop Catering Christoph Eigenmann, Head of OT Logistics Region Sébastien Jacquet, Head of SR Logistics Region CM/Purchasing Fresh Food 1 Domenico Repetto, Head of NWZZ Logistics Region Silvio Baselgia, Head of CM/Purchasing Fresh Food 1 Beat Zaugg, Head of National Logistics Andreas Allenspach, CM/Purchasing Fruit & Vegetables/ Cut Flowers Railcare AG Marc Helfenstein, CM/Purchasing Fresh Convenience Daniel Hintermann, Chairman of the Board of Directors Oliver Krüsi, CM/Purchasing Bread/Baked Goods Philipp Wegmüller, Chairman of the Executive Committee

CM/Purchasing Fresh Food 2 Marc Muntwyler, Head of CM/Purchasing Fresh Food 2 Finance Business Unit Yves Grüninger, CM/Purchasing Dairy Produce/Eggs Adrian Werren, Head of Finance Business Unit, Head of Fabian Schneider, CM/Purchasing Meat Financial Services Matthias Hofer, CM/Purchasing Frozen Products/Fish Hansjörg Klossner, Head of Accounting Yves Kräutli, Head of Controlling CM/Purchasing Basic Foods/Cleaning Martin Meier, Head of Shared Service Centre BW Andrea Kramer, Head of CM/Purchasing Basic Foods/Cleaning Daniel Böni, CM/Purchasing Confectionery/Savoury Snacks Olivier Compagnon, CM/Purchasing Detergents/Cleaning Products/ Property Business Unit Hygiene Christian Coppey, Head of Property Business Unit Philipp Nyffenegger, CM/Purchasing Breakfast/Baking Ingredients Claudio Casal, Head of SR Property Region Pascal Seiler, CM/Purchasing Long-life Convenience/Garnishes Stefano Donzelli, Head of Business Management/Controlling Victor Manuel Martinez, Head of BE Property Region CM/Purchasing Beverages/Specialist Stores Klaus Sedlmeyer, Head of NWZZ Property Region Simon Grieder, Head of CM/Purchasing Beverages/Specialist Philippe Sublet, Head of National Shopping Centres Stores Fritz Ulmann, Head of OT Property Region Sylvia Berger, CM/Purchasing Wines/Sparkling Wines Tobias Schuler, CM/Purchasing Pet Supplies Laura Schmidt, CM/Purchasing Soft Drinks/Beer/Spirits IT/Production/Services Business Unit Daniel Vonach, CM/Purchasing Specialist Stores/Newsstands Reto Conrad, Head of IT/Production/Services Business Unit August Harder, Head of IT CM/Purchasing Near Food/Non Food Martin von Bertrab, Head of BâleHotels Pia Bracher, Head of CM/Purchasing Near Food/Non Food Stephan Rupprecht, Head of Projects Karena Breitenbach, CM/Purchasing Cosmetics/Vitashop Romeo Sciaranetti, Head of Swissmill Pascal Probst, CM/Purchasing Stationery/Travel/Home Textiles/ Andreas Hasler, Head of Chocolats Halba/Sunray Festive Christian Koch, Head of Steinfels Swiss Christian Jochberg, CM/Purchasing Electrical/Kitchen/Dining Gerhard Marty, Head of Reismühle Brunnen/Nutrex Roy Mor, CM/Purchasing Clothing/Jewellery Patrick Steiner, CM/Purchasing Baby/Children’s Clothing/Toys/F&F Update Fitness AG Reto Conrad, Chairman of the Board of Directors CM/Purchasing Services Michael Ammann, Managing Director Andreas Olloz, Head of CM/Purchasing Services Rico Bossi, Head of SBO/SCM Sales Outlets Coop-ITS-Travel AG Mauro Manacchini, Food Project Manager Reto Conrad, Chairman of the Board of Directors Andreas Restle, Managing Director Marketing/Digital Services Thomas Schwetje, Head of Marketing/Digital Services Coop Meeting Centre Philipp Schenker, Head of Marketing/Market Research Reto Conrad, Chairman of the Foundation Board Martin von Bertrab, Delegate to the Foundation Board Betty Bossi AG Philipp Wyss, Chairman of the Board of Directors Société coopérative Centre de Séminaires “du Léman” Lars Feldmann, Managing Director Reto Conrad, Chairman of the Board of Directors Martin von Bertrab, Delegate to the Board of Directors Marché Restaurants Schweiz AG Philipp Wyss, Chairman of the Board of Directors Tropenhaus Frutigen Raoul König, Managing Director Marcel Baillods, Managing Director Corporate governance 72 Coop Group Annual Report 2019

Other subsidiaries

Coop Mineraloel AG Transgourmet Switzerland Hansueli Loosli, Chairman of the Board of Directors Philipp Dautzenberg, Chief Executive Officer Roger Oser, Chief Executive Officer Patrick Lobsiger, Head of Marketing and Purchasing Dominik Köppel, Head of Sales Stefan Tschumi, Head of Human Resources Andreas Parpart, Head of Marketing & Purchasing Andrea Pellizzari, Head of Finance/Controlling/Construction/ Jörg Biermann, Head of Supplies & Retail Property Marc Salathe, Head of Finance & IT Michael Kocher, Head of IT (as of Q1 2019) Ralph Zigerlig, Head of Sales for Switzerland

Transgourmet Holding AG Hansueli Loosli, Chairman of the Board of Directors Bell Food Group AG Hansueli Loosli, Chairman of the Board of Directors Transgourmet Central and Eastern Europe Lorenz Wyss, Chairman of the Group Executive Board, CEO John Matthew, Chief Executive Officer Eastern Europe, Volker Baltes, Member of the Group Executive Board Finance; Administration Xavier Buro, Member of the Group Executive Board, CFO Frank Seipelt, Chief Executive Officer Germany Marco Tschanz, Member of the Group Executive Board Manfred Hofer, Managing Director Purchasing, Manufacturing Companies, Digital Corporate Services Davide Elia, Head of Corporate Marketing/Communication Transgourmet Poland Michael Gloor, Head of Internal Auditing/Compliance Alexander Orlowski, Chief Executive Officer and Managing Director Bernhard Lengacher, Head of HR Bell Food Group Cash & Carry Etienne Petitjean, Head of General Secretariat Piotr Kolodziejczak, Managing Director Finance/Controlling Marco Tschanz, Head of IT Bell Food Group Piotr Sklodowski, Managing Director Purchasing/Marketing Christian Alberty, Managing Director Food Service Convenience business area Volker Baltes, Head of Convenience business area Selgros Romania Thomas Bodenmann, Head of Hügli Division Robert Hellwagner, Chief Executive Officer Martin Henck, Head of Hilcona Division Herwig Arvay, Managing Director Finance/IT André von Steiger, Head of Eisberg Division Robert Hellwagner, Managing Director Purchasing/ Marketing & Sales Bell Switzerland Lorenz Wyss, Head of Bell Switzerland Division Selgros Russia Philipp Allemann, Head of Production/Purchasing Michael Zipfel, Chief Executive Officer Johannes Meister, Head of HR Bell Switzerland Jens Frerichs, Managing Director Purchasing Marko Pirc, Head of Finance/Controlling Bell Switzerland Maximilian von Blanquet, Managing Director Finance Christoph Schatzmann, Head of Quality Management/ Sergej Kuropatov, Managing Director Sales Sustainability Christine Schlatter, Head of Sales/Marketing Transgourmet France Eric Decroix, Chief Executive Officer Bell International Caroline Besselièvre, Head of HR Marco Tschanz, Head of Bell International Division Yves Cebron, Commercial Manager and Head of Product Range Daniel Böhny, Head of Bell Western/Eastern Europe Division Edith Hertz, Deputy Chief Executive Officer Johannes Huber, Head of Hubers/Sütag Division Christian Schröder, Head of Bell Germany Division Transgourmet Österreich Manfred Hayböck, Chief Executive Officer and Managing Finance/Services Division Director Finance Xavier Buro, Finance/Services Division Thomas Panholzer, Chief Executive Officer and Sales Manager Manuel Hofer, Managing Director Purchasing/Goods Jürgen Krizmanich, Managing Director Locations Michael Steinmair, Managing Director Logistics Coop Group in figures 73 Coop Group Annual Report 2019

Coop Group in figures

Key figures 74 Key figures at a glance 74 Development of the Coop Group 75 Net sales 76 Sales outlets/markets 77 Investments (cash flow) 78 Statement of added value 79 Employees 80 Sustainability 84

Report on the financial year 86

Annual consolidated financial statements 88 Consolidated income statement 88 Consolidated balance sheet 89 Consolidated cash flow statement 90 Statement of changes in equity 91 Notes to the annual consolidated financial statements 92 Report of the statutory auditor 114

All values rounded up/down individually. Coop Group in figures Key figures 74 Coop Group Annual Report 2019

Key figures

Key figures at a glance

Total sales Earnings

Net sales segments Equity

17 986 CHF million Retail 10 265 CHF million 50.2% Equity ratio 14 148 CHF million Wholesale/Production

Net sales online trading Cash flow from operating activities

913 CHF million Retail 1 877 CHF million 1 691 CHF million Wholesale/ Production

Employees at 31.12 Investments in tangible fixed assets

47 455 Retail 888 CHF million Switzerland 42 852 Wholesale/Production 360 CHF million abroad

Trainees at 31.12 Sales outlets/markets

2 459 Retail 2 333 Retail 996 Wholesale/Production 145 Wholesale/Production

Net sales Operating result (EBIT) in CHF billion in CHF million as a % of net sales 29.6 29.6 28.2 30 27.3 900 806 9.0 25.9 763 772 782 716 25 750 7.5

20 600 6.0

15 450 4.5 2.8 2.8 2.9 2.6 2.6 10 300 3.0

5 150 1.5

0 2015 2016 2017 2018 2019 0 2015 2016 2017 2018 2019 0 Coop Group in figures Key figures 75 Coop Group Annual Report 2019

Development of the Coop Group

in CHF million or as indicated 2015 2016 2017 2018 2019

Total sales 26 932 28 322 29 207 30 662 30 669

Retail 17 253 17 162 17 405 17 743 17 986 Wholesale/Production 10 611 12 248 13 006 14 170 14 148 Consolidation –1 969 –2 151 –2 259 –2 348 –2 502 Net sales from goods and services 25 895 27 259 28 152 29 565 29 633 of which net sales Switzerland 19 252 19 251 19 476 19 931 20 159 as a % of net sales 74.3 70.6 69.2 67.4 68.0 of which net sales abroad 6 643 8 008 8 676 9 634 9 474 as a % of net sales 25.7 29.4 30.8 32.6 32.0

Earnings before interest, tax, depreciation and amortization (EBITDA) 1 933 2 044 1 994 2 103 2 046 as a % of net sales (EBITDA margin) 7.5 7.5 7.1 7.1 6.9 Operating result (EBIT) 716 763 806 772 782 as a % of net sales (EBIT margin) 2.8 2.8 2.9 2.6 2.6 Profit 416 475 485 473 531 as a % of net sales (profit margin) 1.6 1.7 1.7 1.6 1.8

Cash flow from operating activities 1 653 1 582 1 453 1 701 1 877 as a % of net sales (cash flow margin) 6.4 5.8 5.2 5.8 6.3 Cash flow from investing activities –1 477 –1 939 –1 473 –1 792 –1 391 as a % of net sales 5.7 7.1 5.2 6.1 4.7 Cash flow from financing activities –301 238 –238 325 –536 Free cash flow1 234 61 99 218 533

Total assets 17 654 18 663 19 482 20 364 20 456 Equity incl. minority interests 8 401 8 928 9 339 9 754 10 265 Equity ratio incl. minority interests in % Target value: > 40.0 47.6 47.8 47.9 47.9 50.2

Financial liabilities 4 700 5 043 5 096 5 781 5 348 Net financial liabilities 3 614 4 061 4 368 4 832 4 427 Debt coverage ratio Target value: < 3.0 1.9 2.0 2.2 2.3 2.2 Interest coverage ratio2 Target value: > 8.0 25.4 33.8 40.2 42.7 49.9

FTE (incl. trainees) at 31.12 69 039 73 451 74 638 77 448 78 264 Employees (incl. trainees) at 31.12 79 954 85 001 86 424 89 579 90 307 Trainees at 31.12 3 410 3 505 3 486 3 449 3 455

Retail number of sales outlets/markets at 31.12 2 198 2 254 2 296 2 313 2 333 Retail sales area in m2 at 31.12 1 814 469 1 852 653 1 869 362 1 882 500 1 891 825 Wholesale/Production number of sales outlets/markets at 31.12 214 226 142 145 145 Wholesale/Production sales area in m2 at 31.12 938 768 1 004 472 1 007 100 1 008 731 1 004 633

Number of members 2 536 800 2 542 848 2 582 309 2 547 851 2 536 702

Prior-year figures restated 1 Free cash flow definition: Cash flow from operating activities minus net investments in tangible fixed and intangible assets 2 Interest coverage ratio definition: EBITDA/Interest and other financial expenses Coop Group in figures Key figures 76 Coop Group Annual Report 2019

Net sales in CHF million 2019 2018

Coop Supermarkets 10 452 10 408 Coop@home 159 151 Interdiscount 1 048 1 014 Coop City 764 769 Coop Building & Hobby 630 629 Livique/Lumimart 201 197 Import Parfumerie 147 146 Christ Watches & Jewellery 78 81 Dipl. Ing. Fust Ltd. 1 051 1 031 Coop Vitality AG 213 202 The Body Shop Switzerland Ltd. 27 29 Coop Mineraloel AG 2 478 2 476 Betty Bossi AG 81 75 Marché Restaurants Schweiz AG 113 111 Coop Restaurants 245 245 Other companies and effects from segment consolidation 298 179 Specialist formats 7 534 7 335 Retail 17 986 17 743

in EUR million 2019 2018 Transgourmet France 1 233 1 190 1 372 1 375 Transgourmet Central and Eastern Europe 5 410 5 302 6 019 6 124 Transgourmet Switzerland 1 713 1 598 Transgourmet Österreich 566 529 630 611 Other companies and effects from consolidation Transgourmet 2 2 Transgourmet Group 9 737 9 710 Bell Food Group 4 013 4 059 Coop Cooperative Production 815 802 Other companies and effects from segment consolidation –417 –401 Wholesale/Production 14 148 14 170

Consolidation Coop Group –2 502 –2 348

Net sales 29 633 29 565

Other operating income 1 036 1 097 Total sales 30 669 30 662

of which net sales online trading 2 605 2 329 Online trading in home electronics 602 512 – Microspot.ch 279 242 – Nettoshop.ch 91 88 – Other 231 181 Coop@home 159 151 Other online trading Retail 153 122 Online trading Retail 913 785 Online trading Wholesale/Production 1 691 1 544 of which net sales Switzerland 20 159 19 931 of which net sales abroad 9 474 9 634 Prior-year figures restated Coop Group in figures Key figures 77 Coop Group Annual Report 2019

Sales outlets/markets Number at 31.12 Sales area m2 at 31.12 2019 2018 2019 2018

Coop Supermarkets 931 918 998 966 988 896 Interdiscount 179 186 56 418 62 467 Coop City 31 30 130 600 126 031 Coop Building & Hobby 73 74 307 197 309 920 Livique/Lumimart 44 46 118 466 123 965 Import Parfumerie 115 118 9 593 9 864 Christ Watches & Jewellery 64 65 5 254 5 395 Dipl. Ing. Fust Ltd. 159 155 87 893 87 988 Coop Vitality AG 84 78 10 100 9 623 The Body Shop Switzerland Ltd. 45 45 2 610 2 659 Coop Mineraloel AG 322 318 37 897 37 329 Marché Restaurants Schweiz AG 35 33 15 673 15 481 Coop Restaurants 198 201 60 963 59 510 BâleHotels 4 4 0 0 update Fitness AG 48 40 50 195 43 372 Tropenhäuser 1 2 Specialist formats 1 402 1 395 892 859 893 604

Retail 2 333 2 313 1 891 825 1 882 500

Transgourmet Central and Eastern Europe 101 102 821 592 829 831 Transgourmet Switzerland 31 30 127 560 123 419 Transgourmet Österreich 13 13 55 481 55 481 Transgourmet Group 145 145 1 004 633 1 008 731

Wholesale/Production 145 145 1 004 633 1 008 731

Coop Group 2 478 2 458 2 896 458 2 891 231

Prior-year figures restated Coop Group in figures Key figures 78 Coop Group Annual Report 2019

Investments (cash flow) in CHF million 2015 2016 2017 2018 2019

Switzerland 1 202 992 920 1 016 888 Germany 94 160 161 224 144 France 34 27 27 43 24 Austria 191 58 95 68 Poland 74 36 32 35 29 Romania 17 40 23 33 37 Russia 13 47 38 36 10 Other countries 20 20 22 62 48 Abroad 253 517 361 527 360 Investments in tangible fixed assets 1 455 1 509 1 281 1 544 1 248

Disposals of tangible fixed assets 105 107 59 198 41 Net investments in tangible fixed assets 1 350 1 402 1 222 1 346 1 206

Other net investments 127 537 251 446 184

Net investments 1 477 1 939 1 473 1 792 1 391

Investments in tangible fixed assets by country in CHF million

2019 2018

Other countries 48 62

Russia 10 36

Romania 37 33

Poland 29 35

Austria 68 95

France 24 43

Germany 144 224

Switzerland 888 1 016

0 200 400 600 800 1 000 1 200 1 400 Coop Group in figures Key figures 79 Coop Group Annual Report 2019

Statement of added value in CHF million 2019 2018 Index %

Net sales from goods and services 29 633 29 565 100.2 Other services rendered 1 078 1 139 94.6 Merchandise expenses and other upstream services 22 418 22 475 99.7 Gross added value 8 292 8 230 100.8 Depreciation and amortization/other 1 275 1 315 96.9 Company added value 7 017 6 914 101.5

Employees Wages and salaries 3 884 3 821 101.7 Social security contributions/other contributions 1 259 1 232 102.2 Public sector 1 196 1 213 98.6 Investors 41 49 83.3 Minority interests 105 126 83.7 Retained profits (self-financing) 531 473 112.4 Distribution of added value 7 017 6 914 101.5

Prior-year figures restated The Coop Group’s statement of added value shows the added value created by the Group in a given year and how it is used. The Coop Group aims to create added value on a sustained basis, thereby enabling it to safeguard the Group companies and jobs.

At 73.3% (previous year: 73.1%), the largest proportion of the newly created value goes to the Coop Group’s employees. The Coop Group employed 78 264 FTE (previous year: 77 448).

The public sector receives 17.0% (previous year: 17.5%) from taxes, customs duties and charges.

The 0.6% (previous year: 0.7%) going to investors comprises interest paid. Due to low interest rates, this remains at a relatively low level.

Adequate profits are retained for self-financing purposes and used to safeguard the Group’s continued existence as a going concern, jobs and its ability to provide competitive goods and services for customers. Coop Group in figures Key figures 80 Coop Group Annual Report 2019

Employees

FTE

2019 2018

Coop Supermarkets 18 945 18 833 Coop@home 158 151 Interdiscount 1 679 1 658 Coop City 2 028 2 016 Coop Building & Hobby 1 603 1 601 Livique/Lumimart 561 561 Import Parfumerie 502 503 Christ Watches & Jewellery 281 296 Dipl. Ing. Fust Ltd. 2 173 2 129 Coop Vitality AG 686 649 The Body Shop Switzerland Ltd. 152 166 Coop Mineraloel AG 116 107 Betty Bossi AG 99 102 Marché Restaurants Schweiz AG 616 627 Coop Restaurants 1 568 1 581 Other companies 1 000 999 Logistics/Corporate services 5 547 5 517 Retail 37 714 37 497

Transgourmet France 2 992 3 101 Transgourmet Central and Eastern Europe 21 329 20 713 Transgourmet Switzerland 2 016 1 775 Transgourmet Österreich 1 616 1 658 Transgourmet Group 27 953 27 246 Bell Switzerland 4 771 4 848 Bell abroad 6 022 6 007 Bell Food Group 10 793 10 855 Coop Cooperative Production 1 792 1 838 Other companies 12 12 Wholesale/Production 40 550 39 952

FTE (incl. trainees) at 31.12 78 264 77 448 Coop Group in figures Key figures 81 Coop Group Annual Report 2019

Employees

2019 2018

Coop Supermarkets 24 893 24 782 Coop@home 161 155 Interdiscount 1 753 1 792 Coop City 2 519 2 518 Coop Building & Hobby 2 013 2 003 Livique/Lumimart 644 640 Import Parfumerie 657 672 Christ Watches & Jewellery 386 401 Dipl. Ing. Fust Ltd. 2 248 2 208 Coop Vitality AG 949 893 The Body Shop Switzerland Ltd. 210 220 Coop Mineraloel AG 119 110 Betty Bossi AG 120 127 Marché Restaurants Schweiz AG 922 898 Coop Restaurants 2 049 2 050 Other companies 1 797 1 754 Logistics/Corporate services 6 015 5 972 Retail 47 455 47 195

Transgourmet France 3 058 3 115 Transgourmet Central and Eastern Europe 22 501 22 145 Transgourmet Switzerland 2 205 1 963 Transgourmet Österreich 1 727 1 764 Transgourmet Group 29 491 28 987 Bell Switzerland 5 175 5 241 Bell abroad 6 302 6 224 Bell Food Group 11 477 11 465 Coop Cooperative Production 1 872 1 920 Other companies 12 12 Wholesale/Production 42 852 42 384

Employees (incl. trainees) at 31.12 90 307 89 579 Coop Group in figures Key figures 82 Coop Group Annual Report 2019

Trainees

2019 2018

Coop Supermarkets 1 295 1 359 Interdiscount 325 345 Coop City 157 155 Coop Building & Hobby 121 117 Livique/Lumimart 35 35 Import Parfumerie 45 42 Christ Watches & Jewellery 23 29 Dipl. Ing. Fust Ltd. 87 92 Coop Vitality AG 135 132 The Body Shop Switzerland Ltd. 1 1 Coop Mineraloel AG 4 4 Betty Bossi AG 1 1 Marché Restaurants Schweiz AG 15 10 Coop Restaurants 15 22 Other companies 32 40 Logistics/Corporate services 168 165 Retail 2 459 2 549

Transgourmet France 89 87 Transgourmet Central and Eastern Europe 565 467 Transgourmet Switzerland 83 84 Transgourmet Österreich 73 80 Transgourmet Group 810 718 Bell Switzerland 81 80 Bell abroad 74 75 Bell Food Group 155 155 Coop Cooperative Production 31 27 Wholesale/Production 996 900

Trainees at 31.12 3 455 3 449

Prior-year figures restated Coop Group in figures Key figures 83 Coop Group Annual Report 2019

Employee diversity Retail Wholesale/Production Coop Group as % 2019 2018 2019 2018 2019 2018

Type of employment Full-time employees 56.5 56.7 81.0 81.8 68.1 68.6 Part-time employees 43.5 43.3 19.0 18.2 31.9 31.4 Percentage of women 62.3 62.3 42.1 42.6 52.7 53.0 who are full-time employees 43.9 44.0 37.3 38.0 40.1 40.6 who are part-time employees 86.2 86.1 62.6 63.3 79.5 79.9 in management positions 42.1 41.4 26.3 25.6 35.8 35.3 on Board of Directors and Executive Committee of Coop Group 29.4 29.4 Cooperative Percentage of employees over 50 years of age 25.7 26.6 27.1 26.6 26.4 26.6 Trainees Sales 85.9 86.2 28.4 26.9 69.3 70.7 Commercial 5.0 5.1 38.8 42.1 14.8 14.7 Trades/Other 9.1 8.7 32.8 31.0 15.9 14.6 Country of work Switzerland 99.6 99.7 21.6 21.5 62.6 62.7 Germany 31.3 31.4 14.9 14.9 Poland 11.5 11.3 5.5 5.3 Romania 10.9 11.1 5.2 5.2 France 8.1 8.3 3.8 3.9 Austria 7.3 6.9 3.5 3.3 other 0.4 0.3 9.3 9.5 4.5 4.7 Nationality1 Switzerland 67.3 67.8 43.9 44.2 63.6 64.3 Abroad 32.7 32.2 56.1 55.8 36.4 35.7 Prior-year figures restated 1 only from areas based in Switzerland Coop Group in figures Key figures 84 Coop Group Annual Report 2019

Sustainability

Sustainable products

2015 2016 2017 2018 2019

Sales from sustainable products in CHF million

Sales from sustainable products Coop Group 3 543 3 855 4 256 4 671 4 711 of which organic 1 174 1 255 1 389 1 653 1 793 of which Fairtrade1 373 462 514 755 760 Prior-year figures restated 1 until 2017 excluding UTZ and Rainforest Alliance

Packaging in tonnes

Packaging reduction and optimization, Retail 85 230 145 336 273 Packaging reduction and optimization, Wholesale/Production 145 334 287 605 277 Packaging reduction and optimization, Supermarkets since 2012 24 000

Environmental and climate protection

2015 2016 2017 2018 2019

Energy consumption in megawatt-hours

Retail 1 127 499 1 134 156 1 167 296 1 115 086 1 125 824 Wholesale/Production1 1 441 986 1 527 834 1 602 460 1 593 851 1 610 206 Total energy consumption 2 569 485 2 661 990 2 769 756 2 708 937 2 736 030

Prior-year figures restated 1 until 2018 excluding Hügli Group

Renewable energy sources as a %

Retail 66.8 68.0 68.5 71.5 70.5 Wholesale/Production1 37.0 36.3 39.6 40.1 37.4 Percentage of renewable energy sources 50.1 49.8 51.8 53.7 51.6

Prior-year figures restated

Carbon dioxide emissions (CO2) in tonnes

Retail 107 135 103 849 105 751 97 983 97 393 Wholesale/Production1 350 062 367 049 309 806 322 224 363 463

Total carbon dioxide emissions (CO2) 457 197 470 898 415 557 420 207 460 855

Prior-year figures restated 1 until 2018 excluding Hügli Group Coop Group in figures Key figures 85 Coop Group Annual Report 2019

2015 2016 2017 2018 2019

Water consumption in thousands of cubic metres

Retail 1 060 1 282 1 300 1 378 1 313 Wholesale/Production1 5 632 5 902 6 115 6 756 6 069 Total water consumption 6 692 7 184 7 415 8 134 7 382

1 until 2018 excluding Hügli Group

Waste Recycling rate as %

Retail 80.0 80.2 80.7 80.5 81.2 Wholesale/Production1 70.1 73.4 76.9 78.6 79.7

Waste production in tonnes

Retail 129 896 134 145 139 445 136 665 132 710 Wholesale/Production1 65 409 84 085 109 551 124 073 139 143 Total waste production 195 305 218 230 248 996 260 738 271 853

1 until 2018 excluding Hügli Group

Social commitment

2015 2016 2017 2018 2019

Social commitment in CHF thousands

Coop Sustainability Fund 17 000 18 655 17 511 17 146 16 850 Coop Aid for Mountain Regions 860 827 700 606 597 Additional contributions for social projects 6 496 6 053 5 782 6 952 7 176 Total social commitment 24 356 25 535 23 993 24 704 24 623 Coop Group in figures Report on the financial year 86 Coop Group Annual Report 2019

Report on the financial year

Income statement

Net sales from goods and services The Coop Group’s net sales figure comprises net sales from the Retail and the Wholesale/Production segments. In 2019, it rose by 0.2% to a total of CHF 29 633 million (previous year: CHF 29 565 million). Total sales for the Coop Group amounted to CHF 30 669 million (previous year: CHF 30 662 million). Through its online shops, the Group generated net sales of CHF 2 605 million (previous year: CHF 2 329 million). This equates to a rise of 11.8%, to which both segments contributed.

Operating result (EBIT) Personnel expenses amounted to CHF 5 102 million and other operating expenses to CHF 3 205 million. Earnings before interest, tax, depreciation and amortization (EBITDA) came to CHF 2 046 million (previous year: CHF 2 103 million) with the EBITDA margin slightly lower year on year at 6.9%. Depreciation and amortization of CHF 1 264 million comprises depreciation of land and buildings and installations of CHF 567 million, depreciation of other tangible fixed assets of CHF 464 million, amortization of goodwill of CHF 102 million and amortization of other intangible assets of CHF 131 million. The operating result (EBIT) was up on the prior-year figure of CHF 772 million to CHF 782 million and the EBIT margin remained unchanged at 2.6%.

Profit for the financial year The loss from foreign currencies and the financial result amounts to CHF 47 million (previous year: loss of CHF 40 million). Net of a non-operating loss of CHF 6 million, income taxes of CHF 93 million (previous year: CHF 140 million) and minority interests of CHF 105 million (previous year: CHF 126 million), profit was up by CHF 59 million year on year to CHF 531 million.

Segment report

Retail Coop grew retail sales by 1.4%, generating net sales of CHF 17 986 million. The Coop supermarkets increased footfall by 2.5% and achieved net sales of CHF 10 452 million, exceeding the prior-year figure by 0.4%. The specialist formats lifted net sales by 2.7% to CHF 7 534 million. The consumer electronics business generated net sales of CHF 2 099 million, an increase of 2.6%. They thus consolidated their leading position in the consumer electronics market. Livique/Lumimart once again gained market share and increased net sales by 2.0% to CHF 201 million. Coop Building & Hobby remains the leader in the DIY market. At CHF 630 million, net sales were virtually unchanged compared with the previous year. Following two major refurbishment projects, net sales at Coop City department stores declined by 0.6% to stand at CHF 764 million. Market share was gained in a difficult market environment. Coop Mineraloel AG remains the market leader. Net sales were on a par with the previous year at CHF 2 478 million. The Pronto shops advanced by 1.9%. Coop Vitality AG posted another very encouraging performance, lifting net sales by 5.8% to CHF 213 million. Net retail sales in online business rose by 16.3% to CHF 913 million. Microspot.ch and Coop@home made a substantial contribution to this result. Online supermarket Coop@home posted growth of 5.4% and thus gained market share; net sales amounted to CHF 159 million. The Retail segment‘s operating result (EBIT) increased by CHF 79 million to CHF 540 million (previous year: CHF 462 million). The number of sales outlets in the segment (including restaurants) rose by 20 to 2 333. The Coop Group employed 47 455 people in retailing (previous year: 47 195). Coop Group in figures Report on the financial year 87 Coop Group Annual Report 2019

Wholesale/Production In the Wholesale/Production segment, net sales totalled CHF 14 148 million (previous year: CHF 14 170 million). In local currency terms this represented an increase of 2.5%. The Transgourmet Group, which operates in the cash & carry and wholesale supplies sector in Germany, Poland, Romania, Russia, France, Austria and Switzerland, generated net sales of CHF 9 737 million (previous year: CHF 9 710 million). It advanced by 3.7% in local currencies and further expanded its position as the second-largest company in the European cash & carry and wholesale supplies segment. Transgourmet operated a total of 145 cash & carry markets (previous year: 145) and employed 29 491 people (previous year: 28 987). Net sales at the manufacturing companies totalled CHF 4 835 million (previous year: CHF 4 867 million). In local currency terms this represented an increase of 0.5%. The Bell Food Group is one of Europe’s leading meat and convenience food processors. With its brands Bell, Hilcona, Eisberg and Hügli, the group covers a whole variety of customer requirements. Its customers include retail, food service and the food industry. At CHF 4 013 million, net sales were 1.1% down on the previous year (CHF 4 059 million). The Bell Food Group employed 11 477 people (previous year: 11 465). The Wholesale/Production segment’s operating result (EBIT) fell by CHF 69 million to CHF 242 million (previous year: CHF 311 million).

Financial position and cash flows

Balance sheet The Coop Group’s total assets increased by CHF 92 million year on year. On the assets side, where there was a rise in prepaid expenses and inventories, current assets climbed by CHF 30 million to CHF 6 429 million. Non-current assets rose by CHF 61 million to CHF 14 027 million. Set against the depreciation and amortization expense here are higher investments and additions originating from the acquisitions. Liabilities decreased by CHF 419 million year on year to CHF 10 191 million. Short-term liabilities declined by CHF 133 million to CHF 4 776 million and long-term liabilities by CHF 287 million to CHF 5 415 million. Within long-term liabilities, the Coop Group financed itself through bonds and deposits. Equity including minority interests rose to CHF 10 265 million. The equity ratio climbed to 50.2% as at 31 December 2019 and was therefore well above the strategic target of 40%.

Cash flow statement The cash inflow from operating activities increased by CHF 176 million year on year to CHF 1 877 million. The cash outflow from investing activities was CHF 401 million lower than in the previous year at CHF 1 391 million. This was due to both reduced expenditure on acquisitions and lower net investments in tangible fixed assets. A net amount of CHF 1 344 million was invested in tangible and intangible fixed assets and a further CHF 45 million in acquisitions. In the case of financial assets/securities, a net amount of CHF 2 million was invested. This resulted in free cash flow of CHF 533 million. The cash outflow from financing activities amounted to CHF 536 million. The Coop Group Cooperative made a bond repayment of CHF 250 million. Short and long-term financial liabilities showed a net decrease of CHF 209 million. Moreover, there was a CHF 12 million inflow of funds from the sale of shares in F&B – Food and Beverage Services GmbH and dividends of CHF 89 million were paid to minority interests. Coop Group in figures Annual consolidated financial statements 88 Coop Group Annual Report 2019

Annual consolidated financial statements

Consolidated income statement in CHF million Notes 2019 2018

Net sales from goods and services 1 29 633 29 565 Other operating income 2 1 036 1 097 Merchandise expenses 20 316 20 350 Personnel expenses 3 5 102 5 011 Other operating expenses 4 3 205 3 198 Earnings before interest, tax, depreciation and amortization (EBITDA) 2 046 2 103

Depreciation on tangible fixed assets 5 1 031 1 009 Amortization on intangible assets 5 233 322 Operating result (EBIT) 1 782 772

Result of associated organizations 0 2 Result from foreign currencies –17 –17 Financial result 6 –30 –22 Ordinary result 736 735

Non-operating result 7 –6 4 Result before income taxes (EBT) 730 739

Income taxes 8 93 140 Result after income taxes 637 599

Minority interests 105 126

Profit 531 473

Prior-year figures restated Coop Group in figures Annual consolidated financial statements 89 Coop Group Annual Report 2019

Consolidated balance sheet in CHF million Notes 31.12.2019 31.12.2018

Cash and cash equivalents 9 917 945 Securities 4 4 Receivables from goods and services 10 1 273 1 282 Other short-term receivables 11 285 297 Prepayments and accrued income 565 535 Inventories 12 3 384 3 336 Current assets 6 429 6 398

Tangible fixed assets 13 12 803 12 675 Financial assets 14 150 158 Intangible assets 15 1 074 1 132 Non-current assets 14 027 13 966

Assets 20 456 20 364

Payables from goods and services 1 793 1 864 Short-term financial liabilities 16 924 1 126 Other short-term liabilities 17 378 356 Short-term provisions 18 261 255 Accrued liabilities and deferred income 1 420 1 306 Short-term liabilities 4 776 4 908 Long-term financial liabilities 16 4 425 4 655 Long-term provisions 18 990 1 047 Long-term liabilities 5 415 5 702 Liabilities 10 191 10 610

Retained earnings 9 337 8 916 Capital reserves –233 –241 Profit 531 473 Equity excluding minority interests 9 635 9 148 Minority interests 630 606 Equity incl. minority interests 10 265 9 754

Liabilities and equity 20 456 20 364 Coop Group in figures Annual consolidated financial statements 90 Coop Group Annual Report 2019

Consolidated cash flow statement in CHF million 2019 2018

Result after income taxes 637 599 Depreciation and amortization 1 168 1 286 Impairment loss 120 73 Reversal of impairment –17 –25 Gains (–)/losses on disposal of fixed assets –13 –91 Other non-cash expenses/income 54 48 Result of associated organizations 0 –2 Dividends received from associated organizations 1 0 Increase (–)/decrease in receivables from goods and services 37 0 Increase (–)/decrease in other receivables, prepayments and accrued income –12 24 Increase (–)/decrease in inventories –79 –44 Increase/decrease (–) in payables from goods and services –95 –88 Increase/decrease (–) in other short-term liabilities, accrued liabilities and deferred 101 –22 income Increase/decrease (–) in short-term provisions 6 –50 Increase/decrease (–) in long-term provisions –31 –8 Cash flow from operating activities 1 877 1 701

Investments in tangible fixed assets –1 248 –1 544 Disposals of tangible fixed assets 41 198 Investments in financial assets/securities –14 –76 Disposals of financial assets/securities 12 63 Payment for the acquisition of consolidated organizations –45 –296 Investments in intangible assets –137 –139 Disposals of intangible assets 0 1 Cash flow from investing activities –1 391 –1 792

Inflows from bonds issuance 0 650 Outflows for bonds repayments –250 –175 Capital increase/reduction 6 198 Dividends to minority shareholders –89 –88 Acquisition/disposal minority interests 6 –389 Increase/decrease (–) in short-term financial liabilities –333 76 Increase/decrease (–) in long-term financial liabilities 124 53 Cash flow from financing activities –536 325

Cash flow –50 234

Cash and cash equivalents at beginning of the reporting period 945 722 Cash flow –50 234 Effect of exchange rate changes on cash and cash equivalents 23 –11 Cash and cash equivalents at end of the reporting period 917 945 Coop Group in figures Annual consolidated financial statements 91 Coop Group Annual Report 2019

Statement of changes in equity in CHF million Retained Accumulated Capital Profit Equity excl. Minority Equity incl. profits currency reserves minority interests minority differences interests interests

Equity at 1.1.2019 9 448 –532 –241 473 9 148 606 9 754 Capital increase/reduction 6 6 Changes to the scope of consolidation 8 8 Acquisition/disposal minority interests 8 8 –2 6 Appropriation of prior-year profit 473 –473 Profit 531 531 105 637 Dividends –89 –89 Effect of exchange rate changes –52 –52 –4 –56 Equity at 31.12.2019 9 921 –584 –233 531 9 635 630 10 265

Equity at 1.1.2018 8 963 –391 –145 485 8 912 427 9 339 Capital increase/reduction –6 –6 204 198 Changes to the scope of consolidation 85 85 Acquisition/disposal minority interests –90 –90 –139 –229 Appropriation of prior-year profit 485 –485 Profit 473 473 126 599 Dividends –88 –88 Effect of exchange rate changes –141 –141 –8 –148 Equity at 31.12.2018 9 448 –532 –241 473 9 148 606 9 754

An increase or reduction in the ownership interest in fully consolidated organizations is regarded as a transaction with owners. The difference between the transaction price and the corresponding minority interest is eliminated against equity and presented as capital reserves. In 2019, 49% of the shares in F&B - Food & Beverage Services GmbH were sold to the Oetker Group. In 2018, following the acquisition of a majority stake in the Hügli Group, the shareholding was gradually increased. In addition, the outstanding shares were acquired in Service 7000 AG. Coop Group in figures Annual consolidated financial statements 92 Coop Group Annual Report 2019

Notes to the annual consolidated financial statements

Consolidation and accounting principles

Basis of accounting The annual consolidated financial statements are based on the annual financial statements of the Group companies prepared as at 31 December 2019 in accordance with uniform policies and present a true and fair view of the financial position, results of operations and cash flows. The consolidated financial statements of the Coop Group comply with all Swiss GAAP ARR (Accounting and Reporting Recom- mendations) and Swiss legal provisions. Assets are measured at purchase or production cost. Liabilities are carried at their historical value. The income statement is presented using the total cost (nature of expense) method. The valuation principles were applied unchanged compared with the previous year. The annual consolidated financial statements of the Coop Group are presented in Swiss francs (CHF). Unless otherwise indicated, all amounts are stated in millions of Swiss francs.

Cash flow statement The cash flow statement is prepared on the basis of the fund comprising cash and cash equivalents. Cash flow from operating activities is calculated using the indirect method.

Scope of consolidation The annual consolidated financial statements of the Coop Group comprise the Coop Group Cooperative and its equity investments. The Coop Group Cooperative equity investments are listed in the notes under Scope of consolidation (significant companies). Fully consolidated organizations are organizations where the Coop Group directly or indirectly holds more than 50% of the voting rights. Associated organizations are entities over which the Coop Group is able to exercise significant influence. This is usually the case if it holds between 20% and 50% of the voting rights. Equity investments where it holds less than 20% are not consolidated and are presented in financial assets at cost less any necessary write-downs.

Consolidation method Fully consolidated organizations Assets, liabilities, income and expenses are consolidated in full. Capital consolidation uses the purchase method, whereby an organization’s equity at the date of acquisition or initial consolidation is eliminated against the carrying amount of the investment at the parent. Newly acquired organizations are revalued at their current value applying uniform Group policies and included in the annual consolidated financial statements from the date on which control takes effect. If the cost of acquisition is higher than the revalued net assets acquired, the remaining excess is recognized as goodwill and amortized on a straight-line basis. Purchase price adjustments contingent on future events are forecasted. If the final purchase price differs from the estimate, goodwill is adjusted accordingly. A negative goodwill (badwill) is credited to the income statement in the period of acquisition. Organiza- tions sold are included up until the date on which control is lost, which is usually the date of sale. Min- ority interests in consolidated equity and in profit or loss are presented separately in the balance sheet and income statement. An increase or reduction in the ownership interest in fully consolidated organizations is regarded as a transaction with owners. Gains and losses on such transactions are therefore eliminated directly against equity. Intercompany transactions and relationships, i.e. income, expenses, receivables and liabilities between consolidated organizations, are offset and eliminated. If significant, intercompany profits on trans actions within the Group are eliminated.

Associated organizations If economically significant, associated organizations are included in the annual consolidated financial statements using the equity method. The financial statements of these organizations prepared in accordance with the true and fair view principle are used to determine the share of equity. Coop Group in figures Annual consolidated financial statements 93 Coop Group Annual Report 2019

Currency conversion Local assets and liabilities are converted into Swiss francs at the exchange rate at the balance sheet date. The local income statements and the cash flow statements are converted at the average rate. Any differences arising from the use of these two different conversion rates are taken directly to equity. When foreign subsidiaries or associated organizations are sold, the proportionate accumulated currency differences are transferred from equity to the income statement.

Foreign currency exchange rates into CHF

Average rates Closing rates 2019 2018 31.12.2019 31.12.2018

1 EUR 1.113 1.155 1.085 1.127 1 GBP 1.268 1.306 1.276 1.260 1 HKD 0.127 0.125 0.124 0.126 100 HUF 0.342 0.362 0.328 0.351 1 PLN 0.259 0.271 0.255 0.262 1 RON 0.234 0.248 0.227 0.242 1 RUB 0.015 0.016 0.016 0.014 1 USD 0.994 0.978 0.966 0.984

Net sales from goods and services Net sales from goods and services result from the sale of goods and the provision of services in the course of ordinary activities during the reporting period. Net sales from the sale of goods to customers are generated in the supermarkets, the various specialist formats, the wholesale stores and the supplies business or originate from goods produced at Coop’s own manufacturing companies. Net sales from services originate from the provision of transport services, from hotel business and from fitness centre membership subscriptions, for example. Sales are recognized at fair value. Sales and value-added taxes as well as sales reductions such as discounts, rebates and other allowances are deducted from the net sales reported. Sales are recognized when the significant risks and rewards incidental to ownership of the products sold as well as control have transferred to the customer and it is reasonably certain that the resulting receivables will be collectible in cases where the transaction is not a cash sale. Net sales from the provision of services are recognized in the accounting period in which the service was rendered. In the event of agency transactions, only the value of the service rendered by the entity itself is reported.

Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at nominal value. They comprise cash on hand, postal and bank account balances, short-term deposits, cheques, vouchers and Reka cheques. These items are convertible into cash at any time and subject to an insignificant risk of changes in value.

Securities Securities are marketable instruments that can be easily realized. They are carried in the balance sheet at market value. Unlisted securities are carried in the balance sheet at cost less any necessary write- downs.

Receivables from goods and services and other short-term receivables Receivables are carried in the balance sheet at nominal value. Valuation allowances for losses that are identifiable and have occurred are deducted and charged to the income statement.

Inventories Inventories are stated at the lower of cost or net realizable value. Cost comprises the net purchase price and incidental charges. Purchased inventories are measured at the average cost price (moving average price) and internally produced inventories at production cost. Inventories are stated at net realizable value if this is lower than cost. Discounts are treated as reductions in the purchase price. Specific valuation allowances are recognized for goods that are no longer serviceable or difficult to sell. Coop Group in figures Annual consolidated financial statements 94 Coop Group Annual Report 2019

Financial assets Financial assets include the associated organizations recognized using the equity method. Long-term loans and securities held for the purpose of long-term investment are also presented as financial assets. Securities and loans are stated at cost less any necessary write-downs. Assets from employer contribution reserves are recognized as financial assets.

Tangible fixed assets Tangible fixed assets, which also include properties not used for operating purposes, are stated at cost less any necessary depreciation. Cost comprises the purchase price plus the directly attributable costs of bringing the assets to usable condition. Investments in existing tangible fixed assets are recognized in the cost of an asset if they increase its value in use over the long term or extend its useful life. Depre- ciation is applied on a straight-line basis over the useful life of the asset. The depreciation period of tangible fixed assets is usually within the following ranges:

Land and buildings Plots of land no depreciation Buildings 40–67

Installations 15–30

Furniture, machinery and IT Furniture/tools 5–10 Sales outlet fittings/market fittings 10–15 Machinery 3–15 Production systems 20–30 IT 3–8

Vehicles 3–10

The depreciation period for buildings ranges from 40 years in the case of properties used for operational purposes and subject to increased use to 67 years in the case of mixed-used properties. Installations are usually depreciated over a period of 15 to 20 years. At production facilities, specific production installations are depreciated over a longer useful life of up to 30 years. Experience shows that fittings in the retail sales outlets have a shorter useful life than fittings in the wholesale markets. Machinery usually has a useful life of up to 15 years, with production systems possibly forming a separate asset category and having a useful life of 20 to 30 years. Heavy commercial vehicles have a depreciation period of up to ten years. Assets under construction include the cumulative project costs eligible for capitalization. Project costs that are not eligible for capitalization are charged to the income statement when incurred. Impairment charges are recognized on assets under construction if there is evidence of impairment. In the event of additions in the scope of consolidation, non-current assets are remeasured on the basis of the cumulative cost of and accumulated depreciation or amortization charges on the acquired assets at the acquisition date. Non-current assets are remeasured by adjusting the accumulated depreciation or amortization so that the acquired assets are measured on a net basis at their actual value at the acquisition date. They are presented gross in the statements of changes in fixed assets. In addition, the depreciation or amortization period is reviewed, and if necessary adjusted, bearing in mind the remaining useful life.

Leases Payments under operating leases are charged to the income statement on a straight-line basis over the lease term. Assets acquired on the basis of leases and for which the risks and rewards pass to the Coop Group at inception of the lease are classified as finance leases. For the relevant assets, therefore, the fair value or, if lower, the net present value of the future, non-cancellable lease payments is recognized as an asset and as a finance lease liability. Assets under finance leases are amortized over the shorter of their estimated useful life and the lease term. Coop Group in figures Annual consolidated financial statements 95 Coop Group Annual Report 2019

Intangible assets This item includes IT software, trademarks, licences, patents and goodwill from acquisitions. Intangible assets are recognized if they are clearly identifiable, the costs can be reliably determined and they yield measurable economic benefits for the entity over several years. They are amortized on a straight-line basis over their useful life. Goodwill from acquisitions is calculated as the difference between the purchase price paid to acquire an entity and the value of the net assets. The net assets correspond to the total of the individual assets of the acquired entity less the liabilities and contingent liabilities under Swiss GAAP ARR at the acquisition date. Any goodwill that arises is generally capitalized and amortized on a straight-line basis. The amortization period is determined based on the expected useful life of the assumed market and synergy potential that gave rise to the goodwill. The depreciation period of intangible assets is usually within the following ranges:

Goodwill up to 20 Trademarks up to 20 Patents/licences 5 Other intangible assets 3–8

Impairment In the Coop Group, non-current assets are tested for impairment annually if there are indications of a decline in value. The recoverable amount is calculated using the capital asset pricing model and taking into account updated assumptions and expected cash flows from the multi-year plan. If the carrying amount exceeds the recoverable amount, it is adjusted in profit or loss by way of an impairment charge.

Liabilities Short-term liabilities include all liabilities due within one year, accrued liabilities and deferred income, and short-term provisions. Long-term liabilities comprise obligations with a maturity of more than one year. One of the ways in which Coop raises financing is the Depositenkasse, which provides investors with interest-bearing deposit accounts. After the statutory six month blocking period on new deposits, CHF 20 000 can be withdrawn from the available balance on the deposit account each month. Amounts in excess of this limit require three months’ notice. The breakdown of deposit accounts into short and long-term financial liabilities is based on empirical values for past outflows (substance over form). Short-term and long-term liabilities are carried in the balance sheet at their nominal amounts.

Provisions Provisions are recognized if a past event gives rise to a probable legal or constructive obligation, the amount and/or timing of which is uncertain, but can be estimated. Provisions are measured on the basis of an estimate of the probable outflow. Provisions are discounted if the effect is material.

Income taxes Current income taxes are recognized on an accrual basis based on the results of operations actually generated and presented in the reporting period. Deferred income taxes are recognized for all temporary taxable or tax-deductible differences between the tax base and Swiss GAAP ARR carrying amounts using the balance sheet liability method. The deferred income taxes to be recognized annually are calculated at the future tax rate applicable to the taxable entity in question at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset if they relate to the same taxable entity and are levied by the same taxation authority. Coop Group in figures Annual consolidated financial statements 96 Coop Group Annual Report 2019

Derivative financial instruments The Coop Group uses derivative financial instruments to hedge currency risk. Both derivative financial instruments for the purposes of hedging balance sheet items and those not held for hedging purposes are recognized at current values. The change in the current values since the last measurement is recognized in profit or loss for the period. Instruments used to hedge contractual future cash flows are not recognized in the balance sheet, but disclosed in the notes to the financial statements. Derivative financial instruments outstanding at the balance sheet date are disclosed in the notes to the annual consolidated financial statements.

Pension benefit obligations Pension benefit obligations are all obligations arising from pension plans and pension institutions that provide retirement, death and disability benefits. Coop Group employees receive pension benefits, or old-age pensions, which are in line with the legal regulations and provisions applicable in each of the countries. Pension plans and pension institutions are usually funded from employer and employee contributions. The contributions made by Coop Group companies are included in personnel expense under social security contributions. In Switzerland, employees are members of a legally independent pension institution or a collective foundation of banks or insurance companies. The terms provide for benefits that usually go well beyond the statutory minimum under Swiss law. In addition, within the pension institution, most employees can choose whether to join a plan with higher or lower savings contributions. Annually, it is assessed whether a pension institution gives rise to an economic benefit or an economic obligation from the organization’s perspective. The pension institutions’ annual financial statements prepared in accordance with Swiss GAAP FER 26 and giving a true and fair view of the existing surplus or deficit are taken as the basis for the assessment. An economic benefit is only recognized if it is permitted and intended to use the surplus to reduce employer contributions. Any freely available employer contribution reserves are recognized as assets. An economic obligation is recognized if the requirements for recognizing a provision are met. The Group companies abroad do not have legally independent pension institutions with separated assets. Here, obligations arising from pension plans are recognized directly in the balance sheet.

Related party transactions Associated organizations, pension funds and natural persons such as members of the Executive Com- mittee or Board of Directors are considered to be related parties. Significant financial statement items with associated organizations and other related party transactions are disclosed in the notes to the annual consolidated financial statements.

Off-balance sheet transactions Contingent liabilities such as guarantees, guarantee obligations, pledges and other obligations not required to be recognized in the balance sheet are measured at each balance sheet date and disclosed at nominal value. Other obligations not required to be recognized in the balance sheet include all long-term obligations entered into which cannot be terminated within one year. If contingent liabilities and other obligations not required to be recognized in the balance sheet lead to an outflow of funds without any usable inflow of funds and this outflow of funds is probable and can be estimated, a provision is recognized. Coop Group in figures Annual consolidated financial statements 97 Coop Group Annual Report 2019

Restatement of prior-year figures Under Swiss GAAP FER 17.17, the cost of inventories also includes incidental costs such as transportation costs or freight forwarding and unloading costs. Inventories are therefore measured taking into account personnel and transportation costs incurred internally. These costs were previously presented in full as merchandise expenses. They are now presented as personnel expenses and other operating expenses. The consolidated income statement and tables 3 and 4 in the Notes to the annual consolidated financial statements have therefore been adjusted accordingly for the 2018 period. However, the change in the balance as a result of including these expenses in the measurement of inventories continues to be recognized as merchandise expenses. Coop Group in figures Annual consolidated financial statements 98 Coop Group Annual Report 2019

in CHF million

1 Net sales from goods and services and operating result (EBIT) by segment 2019 2018 Net sales from Operating result Net sales from Operating result goods and services (EBIT) goods and services (EBIT)

Retail 17 986 540 17 743 462 Wholesale/Production 14 148 242 14 170 311 Consolidation –2 502 –2 348 Coop Group 29 633 782 29 565 772

“Wholesale/Production” comprises the Transgourmet Group, the Bell Food Group and the manufacturing companies of the Coop Cooperative. The Consolidation line contains deliveries between the segments.

Net sales from goods and services by geographic market 2019 2018

Switzerland 20 159 19 931 Abroad 9 474 9 634 Coop Group 29 633 29 565

2 Other operating income 2019 2018

Operating rental income 189 193 Gains on the disposal of operating fixed assets 5 72 Own work capitalized 31 27 Other income from services 811 805 Total 1 036 1 097

The item “Other income from services” also includes pools and lottery income, income from parking and advertising, and commissions from phone credits.

3 Personnel expenses 2019 2018

Wages/salaries 3 884 3 821 Social security contributions 913 869 Other personnel expenses 305 320 Total 5 102 5 011

Social security contributions as a % 23.5 22.7

Prior-year figures restated

4 Other operating expenses 2019 2018

Advertising expense 515 534 Rental expense 741 737 Office and administrative expense 292 279 Charges and insurance premiums (non-life) 86 91 Operations-related taxes 46 45 Maintenance and replacement costs 464 461 Energy and supplies 438 450 Transport costs 416 406 Miscellaneous expenses 206 195 Total 3 205 3 198

Prior-year figures restated

The “Operations-related taxes” item comprises capital and property transfer taxes, duties on the issue of securities and other fiscal levies. The “Miscellaneous expenses” item comprises uncovered damage/losses, losses on receivables, unscheduled closure costs and miscellaneous operating costs. Coop Group in figures Annual consolidated financial statements 99 Coop Group Annual Report 2019

in CHF million

5 Depreciation and amortization 2019 2018

Goodwill, planned amortization 100 196 Goodwill, extraordinary amortization 2 21 Other intangible assets, planned amortization 109 105 Other intangible assets, extraordinary amortization 22 0 Amortization on intangible assets 233 322 Tangible fixed assets, planned depreciation 959 983 Tangible fixed assets, extraordinary depreciation 89 51 Reversals of depreciation charges on tangible fixed assets –17 –25 Depreciation on tangible fixed assets 1 031 1 009 Total 1 264 1 331

Extraordinary depreciation of tangible fixed assets, extraordinary amortization of intangible assets and reversals of depreciation charges on real estate are recognized based on reassessments of earnings or changes in market prices.

6 Financial result 2019 2018

Dividends and revaluation gains on securities 0 0 Other financial income 11 27 Financial income 11 27 Revaluation losses on securities 0 0 Interest and other financial expenses 41 49 Value adjustments to financial assets 0 0 Financial expenses 41 49 Total –30 –22

7 Non-operating result 2019 2018

Rental income 0 1 Gains on the disposal of non-operating fixed assets 13 6 Non-operating income 13 7 Non-operating property expenses ( incl. depreciation on non-operating fixed assets) 10 3 Other non-operating expenses 9 0 Non-operating expenses 19 3 Total –6 4

The non-operating result comprises income and expenses arising from events or transactions which clearly differ from the ordinary operations of the Coop Group. These items mainly include non-operating expenses and income on properties not used for operating purposes. Coop Group in figures Annual consolidated financial statements 100 Coop Group Annual Report 2019

in CHF million

8 Income taxes 2019 2018

Current income taxes 130 145 Change in deferred taxes –37 –5 Total 93 140

2019 2018 Tax rate Tax amount Tax rate Tax amount as % in CHF million as % in CHF million

Average applicable tax rate/expected income taxes 15.9 116 19.4 143 Losses in the current year for which no deferred tax assets were recognized 65 15 Use of unrecognized loss carryforwards –4 –30 Average applicable income tax rate after loss carryforwards 24.3 177 17.4 129 Other effects –84 11 Effective income tax rate/Effective income taxes 12.8 93 18.9 140

Expected income taxes are calculated based on the assumption that the non-operating result will be taxed the same as the ordinary result. Over half of the other effects in 2019 are the result of changes in tax rates for deferred taxes. The additional effects are due mainly to non-taxable income and expenses and prior-period income taxes.

A deferred income tax asset of CHF 223 million (31.12.2018: CHF 179 million) on tax losses carried forward not yet used was not recognized.

9 Cash and cash equivalents 31.12.2019 31.12.2018

Cash on hand, postal and bank account balances 871 910 Cheques/vouchers 29 23 Term deposits 17 11 Total 917 945

10 Receivables from goods and services 31.12.2019 31.12.2018

Receivables from goods and services 1 324 1 333 Value adjustment –51 –51 Total 1 273 1 282

11 Other short-term receivables 31.12.2019 31.12.2018

Other receivables 276 290 Prepayments to suppliers 10 9 Value adjustment –2 –2 Total 285 297

12 Inventories 31.12.2019 31.12.2018

Merchandise 2 793 2 746 Finished goods (production) 233 215 Unfinished goods, work in progress 186 177 Raw materials 176 187 Supplies and packaging materials 87 82 Prepayments to suppliers 50 68 Value adjustment –141 –139 Total 3 384 3 336 Coop Group in figures Annual consolidated financial statements 101 Coop Group Annual Report 2019

in CHF million

13 Tangible fixed assets Undeveloped Land and Installations Furniture, Vehicles Finance Assets under Total property buildings machinery leases construction and IT

Tangible fixed assets 2019

Cost 1.1.2019 221 11 099 6 451 5 436 602 3 663 24 474 Changes to the scope of consolidation 6 2 7 6 21 Investments 1 196 244 305 54 0 477 1 276 Disposals –2 –102 –93 –237 –48 0 –4 –486 Effect of exchange rate changes 3 –61 –44 –38 –12 0 –5 –156 Reclassifications –35 224 125 122 33 0 –470 0 Cost 31.12.2019 188 11 362 6 684 5 596 635 3 660 25 129

Accumulated amortization at 1.1.2019 4 4 192 3 634 3 646 320 2 0 11 799 Changes to the scope of consolidation 4 1 5 4 14 Planned depreciation 199 328 360 72 0 960 Extraordinary depreciation 0 47 18 29 0 2 96 Reversals of extraordinary depreciation –17 –17 Disposals –87 –93 –233 –44 0 –1 –459 Effect of exchange rate changes 0 –16 –19 –25 –6 0 0 –67 Reclassifications 0 2 –2 0 0 0 0 Accumulated amortization at 31.12.2019 4 4 324 3 866 3 782 347 2 0 12 326

Net carrying amount 31.12.2019 184 7 038 2 818 1 814 289 1 660 12 803 of which non-operating 55 55 of which prepayments 49 49

Tangible fixed assets 2018

Cost 1.1.2018 181 10 803 6 326 5 308 582 15 521 23 735 Changes to the scope of consolidation 1 135 15 175 6 5 337 Investments 26 265 330 302 62 0 649 1 634 Disposals –228 –261 –381 –65 –12 –28 –974 Effect of exchange rate changes –10 –120 –57 –49 –13 0 –10 –258 Reclassifications 22 243 99 81 29 –474 0 Cost 31.12.2018 221 11 099 6 451 5 436 602 3 663 24 474

Accumulated amortization at 1.1.2018 4 4 080 3 547 3 608 319 13 0 11 572 Changes to the scope of consolidation 40 10 103 3 156 Planned amortization 214 340 360 70 0 0 985 Extraordinary amortization 1 50 0 0 0 51 Reversals of extraordinary depreciation –17 –9 –25 Disposals –149 –254 –374 –62 –12 –850 Effect of exchange rate changes 0 –27 –23 –32 –6 0 0 –89 Reclassifications 1 14 –11 –4 0 0 0 Accumulated amortization at 31.12.2018 4 4 192 3 634 3 646 320 2 0 11 799

Net carrying amount 31.12.2018 217 6 906 2 817 1 790 282 1 663 12 675 of which non-operating 48 48 of which prepayments 20 20

Coop Group in figures Annual consolidated financial statements 102 Coop Group Annual Report 2019

in CHF million

14 Financial assets Employer Associated Other Total contribution organizations financial reserve assets

Financial assets 2019

Net carrying amount 1.1.2019 11 90 58 158 Changes to the scope of consolidation 1 1 Investments/Purchase price adjustments 0 –10 13 3 Disposals 0 –12 –12 Write-ups (+)/Value adjustments (–) –1 0 –1 Effect of exchange rate changes 0 0 0 Net carrying amount 31.12.2019 10 79 61 150 of which goodwill associated organizations 8 8

Financial assets 2018

Net carrying amount 1.1.2018 11 80 29 120 Changes to the scope of consolidation 0 0 Investments/Purchase price adjustments 44 39 83 Disposals 0 –36 –10 –46 Write-ups (+)/Value adjustments (–) 0 2 0 2 Effect of exchange rate changes –1 0 –1 Net carrying amount 31.12.2018 11 90 58 158 of which goodwill associated organizations 18 18

Other financial assets 31.12.2019 31.12.2018

Loans 57 55 Miscellaneous financial assets 10 10 Value adjustments to other financial assets –7 –7 Total 61 58 Coop Group in figures Annual consolidated financial statements 103 Coop Group Annual Report 2019

in CHF million

15 Intangible assets Goodwill Trademarks/ Software Other Assets Total Patents/ intangible under Licences assets development

Intangible assets 2019

Cost 1.1.2019 3 842 646 594 49 138 5 270 Changes to the scope of consolidation 29 9 2 1 41 Investments/Purchase price adjustments 2 0 51 5 84 142 Disposals –1 –49 –1 0 –51 Effect of exchange rate changes –10 –1 –4 –1 0 –17 Reclassifications 0 12 11 –23 0 Cost 31.12.2019 3 862 653 607 65 199 5 386

Accumulated amortization at 1.1.2019 3 256 387 426 39 30 4 138 Changes to the scope of consolidation 0 1 0 2 Planned amortization 100 32 71 6 209 Extraordinary amortization 2 21 1 24 Disposals –1 –48 –1 –50 Effect of exchange rate changes –5 –1 –4 –1 –11 Reclassifications 0 –3 3 0 Accumulated amortization at 31.12.2019 3 352 438 444 47 30 4 312

Net carrying amount 31.12.2019 510 215 162 17 169 1 074

Intangible assets 2018

Cost 1.1.2018 3 715 638 514 45 101 5 014 Changes to the scope of consolidation 149 5 38 1 1 195 Investments/Purchase price adjustments 2 80 4 53 139 Disposals 0 –48 –2 0 –50 Effect of exchange rate changes –20 –1 –4 –1 0 –26 Reclassifications –2 3 15 1 –16 0 Cost 31.12.2018 3 842 646 594 49 138 5 270

Accumulated amortization at 1.1.2018 3 082 349 376 36 30 3 873 Changes to the scope of consolidation –34 0 36 1 4 Planned amortization 196 36 66 3 301 Extraordinary amortization 21 21 Disposals 0 –48 –1 –49 Effect of exchange rate changes –7 –1 –4 0 –12 Reclassifications –1 2 0 0 Accumulated amortization at 31.12.2018 3 256 387 426 39 30 4 138

Net carrying amount 31.12.2018 586 259 168 10 108 1 132 Coop Group in figures Annual consolidated financial statements 104 Coop Group Annual Report 2019

in CHF million

16 Financial liabilities Interest rate as 31.12.2019 31.12.2018 % (weighted)

Bank current accounts 3 1 Deposit accounts 0.51 1 770 1 754 Medium-term notes 0.70 310 238 Bonds 2 805 3 055 Bank loans 0.44 90 431 Mortgages 3.68 39 67 Finance leases 0 1 Other financial liabilities 332 233 Total 5 348 5 781 of which short-term financial liabilities 924 1 126 of which long-term financial liabilities 4 425 4 655 of which liabilities to pension funds 0.20 216 200

Liabilities arising from deposit accounts are disaggregated based on experience of past cash outflows. Of the CHF 1 770 million in total (31.12.2018: CHF 1 754 million), CHF 214 million (31.12.2018: CHF 227 million) were recognized as short-term and CHF 1 556 million (31.12.2018: CHF 1 527 million) as long-term liabilities.

Bonds Currency Term Interest rate as 31.12.2019 31.12.2018 % (weighted)

Coop Group Cooperative CHF Jul 2012–2019 1.250 250 Coop Group Cooperative CHF Jul 2015–2020 0.250 300 300 Coop Group Cooperative CHF Jun 2014–2021 0.875 200 200 Bell Food Group Ltd. CHF May 2013–2022 1.750 175 175 Coop Group Cooperative CHF Sep 2016–2022 0.250 200 200 Coop Group Cooperative CHF Sep 2014–2023 1.000 200 200 Coop Group Cooperative CHF Jul 2015–2024 0.880 200 200 Bell Food Group Ltd. CHF Feb 2018–2024 0.375 200 200 Bell Food Group Ltd. CHF Mar 2016–2025 0.625 300 300 Coop Group Cooperative CHF Jun 2018–2025 0.750 300 300 Coop Group Cooperative CHF May 2016–2026 0.500 380 380 Coop Group Cooperative CHF Sep 2017–2027 0.500 200 200 Bell Food Group Ltd. CHF Jan 2018–2028 0.750 150 150 Total 2 805 3 055

17 Other short-term liabilities 31.12.2019 31.12.2018

Vouchers in circulation 76 74 Prepayments from customers 143 145 Other taxes 99 86 Other short-term liabilities 60 51 Total 378 356

Coop Group in figures Annual consolidated financial statements 105 Coop Group Annual Report 2019

in CHF million

18 Provisions Pension Restruc- Supercard Deferred Other Total benefits turings taxes provisions

Provisions 2019 Carrying amounts 1.1.2019 113 13 164 783 230 1 303 Changes to the scope of consolidation 0 0 1 Creation of provisions 26 2 212 56 296 Use of provisions –20 –5 –201 –33 –260 Reversal of provisions no longer required –3 –2 –4 –23 –32 Change in deferred taxes –37 –37 Effect of exchange rate changes –2 0 –16 –1 –19 Carrying amounts 31.12.2019 115 7 171 731 228 1 252 of which short-term provisions 21 5 171 65 261 of which long-term provisions 94 2 731 163 990

Provisions 2018 Carrying amounts 1.1.2018 111 33 180 798 238 1 360 Changes to the scope of consolidation 1 5 5 10 Creation of provisions 26 4 206 50 286 Use of provisions –19 –17 –219 –48 –303 Reversal of provisions no longer required –4 –7 –3 –13 –27 Change in deferred taxes –5 –5 Effect of exchange rate changes –2 0 –15 –2 –18 Carrying amounts 31.12.2018 113 13 164 783 230 1 303 of which short-term provisions 20 9 164 62 255 of which long-term provisions 93 4 783 168 1 047

Other provisions mainly include provisions for personnel in the amount of CHF 110 million (31.12.2018: CHF 102 million) and sales outlets in the amount of CHF 19 million (31.12.2018: CHF 25 million). Coop Group in figures Annual consolidated financial statements 106 Coop Group Annual Report 2019

in CHF million

19 Pension funds

Employer contribution reserve 2019 Nominal value Waiver Balance sheet of use value

Carrying amounts 1.1.2019 11 11 Use (Personnel expenses) 0 0 Carrying amounts 31.12.2019 10 10

Employer contribution reserve 2018

Carrying amounts 1.1.2018 11 11 Use (Personnel expenses) 0 0 Carrying amounts 31.12.2018 11 11

Non-committed funds/deficit Economic share of the Coop Group Economic benefit/economic obligation 31.12.2019 31.12.2018 31.12.2019 31.12.2018

Pension fund with non-committed funds 93 8 0 0 Pension plans without own assets 0 0 –115 –113 Total 93 8 –115 –113

Change in balance sheet item Contributions Pension benefit Change in balance sheet item Contributions Pension benefit 2019 concerning expenses wit- 2018 concerning expenses with- the business hin personnel the business in personnel period expenses period expenses Pension benefit expenses without recognized in 2019 2019 without recognized in 2018 2018 effect on profit or loss effect on profit or loss profit or loss1 profit or loss1

Pension fund without non-commit- 26 26 252 252 ted funds/deficit Pension fund with non-committed 268 268 8 8 funds Pension plans without own assets –21 23 0 23 –20 22 22 Pension fund reinsured 4 4 11 11 Total –21 23 298 321 –20 22 271 293

1 Payments, foreign currency conversion, changes to the scope of consolidation

As at 31 December 2019, the CPV/CAP shows a funding ratio of 116.1% (prior year: 108.4%). In terms of Swiss GAAP FER 16 there is a surplus, as the target for the fluctuation reserve has been reached. Coop Group in figures Annual consolidated financial statements 107 Coop Group Annual Report 2019

in CHF million

20 Off-balance-sheet transactions 31.12.2019 31.12.2018

Guarantees, guarantee obligations 9 10 Other quantifiable commitments with a contingent character 10 10 Other non-recognizable commitments 72 65 Carrying amount of pledged assets 63 127

Obligations to minority interest shareholders from put options on the shares they hold in consolidated Group organizations are presented in “Other non-recognizable commitments”. The same applies to obligations with regard to the acquisition of shares in associated organizations. There are additional contingent liabilities under existing contracts which cannot be estimated reliably due to the low probability of occurrence and the lack of clarity regarding the amount of a potential outflow of funds. These relate mostly to leased properties.

21 Obligations under off-balance sheet operating leases 31.12.2019 31.12.2018

Due within one year 740 766 Due in 1 to 5 years 2 492 2 562 Due in more than 5 years 3 224 3 366

Unrecognized operating lease obligations result mainly from long-term rental and ground lease agreements.

22 Open derivative financial instruments

Contract values Recognized Derivative financial instruments 2019 Not recognized in balance sheet in balance sheet

Underlying asset Purpose Assets Liabilities Assets Liabilities Foreign exchange Hedging 1 531 10 4 0 4

Derivative financial instruments 2018 Contract values Recognized in balance sheet Not recognized in balance sheet

Underlying asset Purpose Assets Liabilities Assets Liabilities Foreign exchange Hedging 1 791 16 2 0 1

23 Related-party transactions

Transactions with associated organizations 2019 2018

Net sales from goods and services 13 19 Other operating income 1 1 Financial income 1 0 Merchandise expenses 9 8 Office and administrative expense 2 2 Rental expense 3 3

31.12.2019 31.12.2018

Receivables from goods and services 1 1 Other short-term receivables 3 0 Loans 39 37 Payables from goods and services 7 7 Short-term financial liabilities 2 0

In addition there are liabilities to pension funds in Switzerland which are presented as financial liabilities. Above and beyond this, there are no other significant transactions with other related parties. Coop Group in figures Annual consolidated financial statements 108 Coop Group Annual Report 2019

24 Significant changes to the scope of consolidation 2019

31.12.2019 31.12.2018 Company Change Date as % as %

Centre Commercial Moncor CH-Villars-sur-Glâne Merged into Coop Cooperative 01/2019 100.0 100.0 S.A. Braschler's Comestibles CH-Zurich Merged into Transgourment Switzerland Ltd. 01/2019 100.0 100.0 Import AG F&B - Food and Beverage DE-Riedstadt Interest reduced 01/2019 51.0 100.0 Services GmbH Team Beverage AG DE-Bremen Interest reduced 01/2019 35.7 70.0 siroop trading Ltd. CH-Basel Dormant 01/2019 100.0 100.0 Interfrais Frisch-Service AG CH-Schlieren Acquired 04/2019 100.0 Sanalogic Solutions GmbH DE-Riedstadt Formation and asset deal 05/2019 100.0 Gastro Profi GmbH AT-Alkoven Acquired 06/2019 100.0 GEVA Beteiligungsgesellschaft DE-Frechen Acquired 09/2019 51.0 mbH

2018

31.12.2018 31.12.2017 Company Change Date as % as %

Hügli Group CH-Steinach Acquired 01/2018 66.3 Der Milchbauer Grosshandels- DE-St. Gangloff Merged into EGV Lebensmittel für Grossverbraucher 01/2018 100.0 100.0 gesellschaft mbH AG Cher-Mignon SA CH-Chermignon Merged into Bell Schweiz AG 01/2018 100.0 100.0 Peter Riegger Holding AG CH-Zug Merged into Weinkeller Riegger AG 01/2018 100.0 100.0 update Beteiligungen AG CH-Uzwil Merged into update Fitness AG 01/2018 51.0 51.0 Niggemann Food Frischemarkt DE-Bochum Acquired 02/2018 100.0 GmbH Two Spice AG CH-Hergiswil Acquired 03/2018 32.8 Braschler's Comestibles CH-Zurich Acquired 04/2018 100.0 Import AG Sylvain & CO SA CH-Champvent Acquired 05/2018 66.3 Service 7000 AG CH-Netstal Interest increased 05/2018 100.0 75.0 siroop Ltd. CH-Zurich Interest increased and merged into 05/2018 100.0 50.0 Coop Cooperative Bell Food Group Ltd. CH-Basel Capital increased 06/2018 66.3 66.3 Palink UAB LT-Vilnius Sold 09/2018 20.0

The interests listed are calculated on the basis of the shares held by the Coop Group. Coop Group in figures Annual consolidated financial statements 109 Coop Group Annual Report 2019

in CHF million

25 Most significant components at aquisition of organizations

2019 Gastro Profi Sanalogic GEVA Interfrais Other GmbH Solutions Group Frisch- entities GmbH Service AG

Cash and cash equivalents 5 5 0 Receivables, prepayments and accrued income 2 52 13 0 Inventories 3 2 0 Tangible fixed assets 1 3 4 0 Financial assets 1 0 Intangible assets (excl. goodwill) 0 3 3 3 Liabilities, accrued liabilities and deferred income 3 50 14 0 Financial liabilities 2 0 Provisions 0 0 0 0

2018 siroop Ltd. Hügli Sylvain & Niggemann Other Group CO SA Food entities

Cash and cash equivalents 3 11 6 1 1 Receivables, prepayments and accrued income 3 61 9 7 6 Inventories 3 72 1 3 20 Tangible fixed assets 1 160 9 4 8 Financial assets 0 0 Intangible assets (excl. goodwill) 1 2 0 5 Liabilities, accrued liabilities and deferred income 12 45 6 8 3 Financial liabilities 84 5 1 0 Provisions 1 7 1 1 1 Coop Group in figures Annual consolidated financial statements 110 Coop Group Annual Report 2019

26 Scope of consolidation Interest held1 Method of inclusion 31.12.2019 31.12.2018 as % as %

Coop Group Coop Group Cooperative CH-Basel 100.0 100.0 q Alifresca Ltd. CH-Basel 100.0 100.0 q Alifresca Italy S.R.L. IT-Villafranca di 100.0 100.0 q Verona Alifresca Spain S.L. ES-Valencia 100.0 100.0 q Autobahn-Raststätte Basel-Nord AG CH-Basel 38.3 38.3 l CapCo AG FL-Vaduz 100.0 100.0 q Centre de formation “du Léman” CH-Jongny 100.0 100.0 q Chocolats Halba S.A. de C.V. HN-San Pedro Sula 75.0 75.0 q Coop-ITS-Travel AG CH-Freienbach 50.0 50.0 l Coop Mineraloel AG CH-Allschwil 51.0 51.0 q Coop Tagungszentrum CH-Muttenz 100.0 100.0 q Coop Vitality AG CH-Bern 51.0 51.0 q Coop Vitality Management AG CH-Bern 51.0 51.0 q Elektronik Distribution AG CH-Basel 100.0 100.0 q Eurogroup Europe AG CH-Wangen 100.0 100.0 q Eurogroup Far East Ltd. CN-Hong Kong 100.0 100.0 q Marché Restaurants Schweiz AG CH-Dietlikon 100.0 100.0 q Panflor AG CH-Zurich 100.0 100.0 q railCare AG CH-Härkingen 100.0 100.0 q Raststätte Glarnerland AG CH-Niederurnen 21.3 21.3 q Raststätte Heidiland AG CH-Maienfeld 51.5 51.5 q Relais du St-Bernard Martigny SA CH-Martigny 68.0 68.0 l Retail Marketing Switzerland AG CH-Basel 100.0 100.0 q SC Swiss commercial GmbH DE-Konstanz 100.0 100.0 q Stazioni Autostradali Bellinzona SA CH-Bellinzona 68.4 68.4 l Steinfels Swiss GmbH DE-Konstanz 100.0 100.0 q Tanklager Rothenburg AG CH-Rothenburg 17.0 17.0 l Two Spice AG CH-Zurich 32.8 32.8 l update Fitness AG CH-Uzwil 51.0 51.0 q update akademie GmbH CH-Uzwil 25.5 25.5 l Coop Cooperative CH-Basel 100.0 100.0 q Betty Bossi AG CH-Zurich 100.0 100.0 q Coop Immobilien AG CH-Bern 100.0 100.0 q Dipl. Ing. Fust Ltd. CH-Oberbüren 100.0 100.0 q Parking des Remparts SA CH-La Tour-de-Peilz 33.3 33.3 l Pearlwater Mineralquellen AG CH-Termen 100.0 100.0 q RS Vertriebs AG CH-St. Gallen 100.0 100.0 q Service 7000 AG CH-Netstal 100.0 100.0 q The Body Shop Switzerland Ltd. CH-Uster 100.0 100.0 q

Transgourmet Group Transgourmet Holding AG CH-Basel 100.0 100.0 q gastronovi GmbH DE-Bremen 51.0 51.0 q Interfrais Frisch-Service AG CH-Schlieren 100.0 q Transgourmet Central and Eastern Europe AG CH-Basel 100.0 100.0 q Transgourmet Central and Eastern Europe GmbH DE-Riedstadt 100.0 100.0 q Ahoii GmbH DE-Hamburg 8.9 17.6 l Brand Views GmbH DE-Hamburg 22.3 43.8 l EGV Lebensmittel für Grossverbraucher AG DE-Unna 100.0 100.0 q Coop Group in figures Annual consolidated financial statements 111 Coop Group Annual Report 2019

Interest held1 Method of inclusion 31.12.2019 31.12.2018 as % as %

F&B - Food and Beverage Services GmbH DE-Riedstadt 51.0 100.0 q FrischeParadies GmbH & Co. KG DE-Frankfurt 100.0 100.0 q FRISCHEPARADIES ESPAÑA S.L.U. ES-Palma de Mallorca 100.0 100.0 q Fruchthof Handel-GmbH AT-Innsbruck 100.0 100.0 q gastivo portal GmbH DE-Bremen 35.7 70.0 q Gastro Tracking GmbH DE-Nuremberg 17.9 35.0 l Geo-Marketing GmbH DE-Cologne 25.0 25.0 l GEVA Beteiligungsgesellschaft mbH DE-Frechen 51.0 q GEVA Gesellschaft für Einkauf, Verkaufsförderung und Absatz von Gütern mbH DE-Frechen 26.0 q GEVA Gesellschaft für Einkauf, Verkaufsförderung und Absatz von Gütern mbH & Co. KG DE-Frechen 26.0 q Hamburger Feinfrost GmbH DE-Hamburg 100.0 100.0 q MVF Markenvertriebs- und Förderungsgesellschaft mbH DE-Frechen 26.0 q NEV Nordwest GmbH DE-Bremen 35.7 70.0 q Niggemann Food Frischemarkt GmbH DE-Bochum 100.0 100.0 q OOO Basa RU-Moscow 100.0 100.0 q OOO Mikotrans RU-Moscow 100.0 100.0 q OOO Selgros RU-Moscow 100.0 100.0 q OOO Selgros Immobilien RU-Moscow 100.0 100.0 q OOO Torgovy Dom Global Foods RU-Moscow 100.0 100.0 q proGetränkePartner GmbH DE-Eggenfelden 17.9 35.0 l Richard Sump GmbH DE-Hamburg 75.0 75.0 q Sanalogic Solutions GmbH DE-Riedstadt 100.0 q SELGROS CASH & CARRY S.R.L. RO-Brasov 100.0 100.0 q Sump & Stammer GmbH International Food Supply DE-Hamburg 75.0 75.0 q Team Beverage AG DE-Bremen 35.7 70.0 q Team Beverage Category Management und Vermarktung GmbH DE-Bremen 35.7 70.0 q Team Beverage Convenience GmbH DE-Rostock 35.7 70.0 q Team Beverage Dienstleistungen GmbH DE-Rostock 35.7 70.0 q Team Beverage Einzelhandel GmbH DE-Bremen 35.7 70.0 q Team Beverage Einzelhandel Süd GmbH DE-Eggenfelden 35.7 70.0 q Team Beverage Großhandel GmbH DE-Bremen 35.7 70.0 q Team Beverage Marken und Systeme GmbH DE-Bremen 35.7 70.0 q Team Business IT GmbH DE-Stralsund 35.7 70.0 q transCoop GmbH DE-Riedstadt 100.0 100.0 q Transgourmet Beteiligungs GmbH AT-Wiener Neudorf 100.0 100.0 q Transgourmet Deutschland GmbH & Co. OHG DE-Riedstadt 100.0 100.0 q Transgourmet Immobilien GmbH & Co. KG DE-Pullach 100.0 100.0 q Transgourmet Foodservice Immobilien GmbH DE-Riedstadt 100.0 100.0 q Transgourmet Polska Sp. z o.o. PL-Poznan 100.0 100.0 q Transgourmet France SAS FR-Valenton 100.0 100.0 q ALDIS ASP 6 SARL FR-Valenton 100.0 100.0 q All Fresh Logistique SAS FR-Rungis 100.0 100.0 q BSP SAS FR-Valenton 100.0 100.0 q COFIDA SAS FR-Rungis 100.0 100.0 q HOLDI CRENO SA FR-Châteaurenard 30.8 30.8 l Locagroup SAS FR-Rungis 100.0 100.0 q Mantes Primeurs SAS FR-Mantes-la-jolie 100.0 100.0 q SCI Mittelfeld-Knoderer FR-Valenton 100.0 100.0 q Sodiexval SAS FR-Rungis 100.0 100.0 q SPEIR SAS FR-Rungis 100.0 100.0 q Coop Group in figures Annual consolidated financial statements 112 Coop Group Annual Report 2019

Interest held1 Method of inclusion 31.12.2019 31.12.2018 as % as %

Transgourmet Immobilier France SAS FR-Valenton 100.0 100.0 q Transgourmet Management Gie FR-Valenton 100.0 100.0 q Transgourmet Opérations SAS FR-Valenton 100.0 100.0 q Transgourmet Seafood SAS FR-Rungis 100.0 100.0 q Transgourmet Services SNC FR-Valenton 100.0 100.0 q Transgourmet Österreich GmbH AT-Traun 100.0 100.0 q Gastro Profi GmbH AT-Alkoven 100.0 q immodevelop GmbH AT-Innsbruck 100.0 100.0 q Top Team Zentraleinkauf GmbH AT-Traun 50.0 50.0 l Transgourmet Switzerland Ltd. CH-Basel 100.0 100.0 q Casa del Vino SA CH-Zurich 100.0 100.0 q Domaines & Châteaux Vins Birrhard SA CH-Birrhard 100.0 100.0 q Grossopanel AG CH-Stans 33.3 33.3 l Weinkeller Riegger AG CH-Mellingen 100.0 100.0 q wine AG Valentin & Von Salis CH-Pontresina 50.0 50.0 l Zanini Vinattieri SA CH-Ligornetto 100.0 100.0 q

Bell Food Group Bell Food Group Ltd. CH-Basel 66.3 66.3 q Bell Schweiz AG CH-Basel 66.3 66.3 q Geiser AG CH-Schlieren 66.3 66.3 q Bell Deutschland Holding GmbH DE-Seevetal 66.3 66.3 q Bell Deutschland GmbH & Co. KG DE-Seevetal 66.3 66.3 q Bell Production Services GmbH & Co. KG DE-Seevetal 66.3 66.3 q Bell Schwarzwälder Schinken GmbH DE-Schiltach 66.3 66.3 q Bell España Alimentación S.L.U. ES-Casarrubios del 66.3 66.3 q Monte Abraham Benelux S.A. BE-Libramont-Che- 66.3 66.3 q vigny Bell Verwaltungs GmbH DE-Seevetal 66.3 66.3 q Interfresh Food GmbH DE-Seevetal 66.3 66.3 q Bell Benelux Holding N.V. BE-Zellik 66.3 66.3 q Bell Benelux N.V. BE-Zellik 66.3 66.3 q Bell Nederland B.V. NL-Houten 66.3 66.3 q Bell Logistics N.V. BE-Zellik 66.3 66.3 q Bell France Holding SAS FR-Teilhède 66.3 66.3 q Bell France SAS FR-St-André-sur-Vieux- 66.3 66.3 q Jonc Salaison Polette & Cie SAS FR-Teilhède 66.3 66.3 q Maison de Savoie SAS FR-Aime 66.3 66.3 q Saloir de Mirabel SARL FR-Riom 66.3 66.3 q Saloir de Virieu SAS FR-Virieu-le-Grand 66.3 66.3 q Val de Lyon SAS FR-Valenton 66.3 66.3 q H.L. Verwaltungs-GmbH AT-Pfaffstätt 66.3 66.3 q Hubers Landhendl GmbH AT-Pfaffstätt 66.3 66.3 q Süddeutsche Truthahn AG DE-Ampfing 66.3 66.3 q Brüterei Schlierbach GmbH AT-Pettenbach 63.0 63.0 q Frisch Express GmbH AT-Pfaffstätt 66.3 66.3 q VTE-Beteiligungs GmbH + Co. KG DE-Ampfing 66.3 66.3 q Bell Polska Sp. z o.o. PL-Niepolomice 66.3 66.3 q ZIMBO Perbal Húsipari Termelö Kft. HU-Perbál 66.2 66.2 q Coop Group in figures Annual consolidated financial statements 113 Coop Group Annual Report 2019

Interest held1 Method of inclusion 31.12.2019 31.12.2018 as % as %

Hilcona AG FL-Schaan 66.3 66.3 q Hilcona Gourmet SA CH-Orbe 66.3 66.3 q Hilcona Feinkost GmbH DE-Leinfelden-Echter- 66.3 66.3 q dingen Frostag Food-Centrum AG CH-Landquart 66.3 66.3 q Eisberg Holding AG CH-Dänikon 66.3 66.3 q Eisberg AG CH-Dällikon 66.3 66.3 q Eisberg Österreich GmbH AT-Marchtrenk 66.3 66.3 q Eisberg Hungary Kft. HU-Gyál 66.3 66.3 q Eisberg Spolka z o.o. PL-Legnica 66.3 66.3 q Eisberg srl RO-Pantelimon 66.3 66.3 q E.S.S.P. España 2000 SL ES-Aguilas 66.3 66.3 q Sylvain & CO SA CH-Champvent 66.3 66.3 q Dr. A. Stoffel Holding AG CH-Steinach 66.3 66.3 q Hügli Holding AG CH-Steinach 66.3 66.3 q Hügli Nährmittel AG CH-Steinach 66.3 66.3 q Hügli Nährmittel-Erzeugung GmbH AT-Hard 66.3 66.3 q Hügli Nahrungsmittel GmbH DE-Radolfzell 66.3 66.3 q Granovita S.A. ES-La Vall d'Uixó 66.3 66.3 q Hügli UK Ltd. GB-Redditch 66.3 66.3 q Bresc B.V. NL-Sleeuwijk 66.3 59.0 q Ali-Big Industria Alimentare s.r.l. IT-Brivio 66.3 66.3 q Hügli Food s.r.o. CZ-Zásmuky u Kolína 66.3 66.3 q Hügli Food Élelmiszeripari Kft. HU-Budapest 66.3 66.3 q Hügli Food Polska sp. z o.o. PL-Lódz 66.3 66.3 q Hügli Food Slovakia s.r.o. SK-Trnava 66.3 66.3 q Centravo Holding AG CH-Zurich 19.7 19.7 l GVFI International AG CH-Basel 16.4 16.4 l Baltic Vianco OÜ EE-Rõuge Vald 22.1 22.1 l q = Fully consolidated company l = Company included by using the equity method 1 The interests listed are calculated on the basis of the shares held by the Coop Group.

27 Events after the balance sheet date

The Board of Directors approved the annual consolidated financial statements of the Coop Group on 12 February 2020. They have to be approved by the Delegate Assembly on 2 April 2020. Coop Group in figures Annual consolidated financial statements 114 Coop Group Annual Report 2019

Statutory Auditor’s Report To the Delegate Assembly of Coop Group Cooperative, Basle

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Coop Group Cooperative and its subsidiaries (the Group), which comprise the consolidated balance sheet as at 31 December 2019 and the consolidated income statement, statement of changes in equity and consolidated cash flow statement for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion the consolidated financial statements (pages 88 to 113) give a true and fair view of the consolidated financial position of the Group as at 31 December 2019, and its consolidated results of operations and its consolidated cash flows for the year then ended in accordance with Swiss GAAP FER and comply with Swiss law.

Basis for Opinion

We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities under those provisions and standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority

Revenue recognition

Valuation of merchandise

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1 Coop Group in figures Annual consolidated financial statements 115 Coop Group Annual Report 2019

Revenue recognition

Key Audit Matter Our response

The Group records its revenue at the time when the In the context of our audit, we have evaluated the risks and rewards resulting from the sale of the appropriateness of the accounting principles in relation products have been transferred to the buyer. Revenue with the Group’s revenue recognition. Regarding the includes the revenue from the front (cash register), on assessment of the correct revenue recognition, we have the one hand, and the delivery revenue (on account), performed amongst others the following audit on the other hand. It is presented net of discount, procedures: rebates and other price reductions. We have analyzed the process regarding revenue Revenue forms a significant basis for the assessment recognition and accrual accounting and we have of the Group’s business performance. Consequently, it assessed whether the value flows are correctly is at the center of internal objectives and of the reflected in the accounts. In this regard, we have development expectations of the public, financial identified the key controls concerning revenue analysts, institutional investors, major creditors and recognition and then tested them for effectiveness other interested parties regarding the evolution of the on a sample basis. We have involved our IT business. As a significant caption in the income specialists in order to support our audit procedures. statement, revenue is therefore of great relevance for In order to examine the correctness of the master the Group. data (product prices, promotion periods, etc.), we have reconciled them with basic documents on a Consequently, we have focused our audit in this area sample basis. on the existence of revenue transactions and their recognition in the appropriate period, as well as on the Regarding front revenue, we have verified the recording of the correct data. correct functioning of the cash registers by examining the system parameters. Moreover, we have reconciled on a sample basis the cash register statements with the corresponding incoming payments. Furthermore, regarding delivery sales, we have examined the recognition of revenue in the appropriate period by a sample-based comparison of invoices, corresponding orders and delivery notes. In this regard, we have focused in particular on the sales transactions shortly before and after the balance sheet date. Moreover, we have examined whether the accounting principles regarding revenue recognition were described and disclosed appropriately.

For further information on revenue recognition refer to the following:

Consolidation and accounting principles

2 Coop Group in figures Annual consolidated financial statements 116 Coop Group Annual Report 2019

Valuation of merchandise

Key Audit Matter Our response

As at 31 December 2019, the Group has inventories of In the context of our audit, we have evaluated the CHF 3.4 billion (previous year: CHF 3.3 billion). appropriateness of the accounting principles in relation Inventories are presented at the lower of acquisition or with the valuation of the Group’s merchandise. We have production cost and net realizable value. performed amongst others the following audit procedures: Of the CHF 3.4 billion of inventories, CHF 2.7 billion concern merchandise (previous year: CHF 2.6 billion). We have assessed the appropriateness of the Merchandise is valued at the average cost price processes regarding the valuation of merchandise. (moving average price), plus logistic surcharges and In this regard, we have identified the key controls less supplier refunds, rebates, discounts, etc. and then tested them for effectiveness on a sample basis. The determination of the correct valuation of Based on samples and with the support of our IT merchandise contains elements of judgment. specialists, we have evaluated the integrity of the Furthermore, there is a risk of overvaluation due to general IT controls and tested the efficiency of key goods that are no longer usable, inventories that are IT application controls. In particular, we have difficult to sell, and price pressure. Consequently, the performed a verification concerning the order entry determination of the value adjustment contains certain process by assessing mandatory fields and areas of judgment. The correct valuation of significant segregations of duties within the order merchandise is thus significant for the overall process. Furthermore, we have verified the correct understanding of the consolidated financial calculation of prices in the system based on system statements. parameters, supplier invoices, as well as additions and disposals. Consequently, when auditing the valuation of inventories, we focused on the correct valuation of Additionally, we have examined whether the merchandise. reductions (supplier refunds, rebates, discounts, etc.) and the logistic surcharges were applied correctly by retracing the calculations. We have critically assessed the appropriateness of the management processes for the identification of goods that are no longer usable and products that are difficult to sell, as well as the basis and the method used for the valuation of this merchandise. We have examined mathematically the calculation of the value adjustments on merchandise. Moreover, we have examined whether the accounting principles were described and disclosed appropriately.

For further information on the valuation of inventories refer to the following:

Consolidation and accounting principles Item 12 of the notes, Inventories

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Other Matter

The consolidated financial statements of Coop Group Cooperative for the year ended 31 December 2018 were audited by another auditor who expressed an unmodified opinion on those statements on 13 February 2019.

Responsibility of the Board of Directors for the Consolidated Financial Statements

The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with Swiss GAAP FER and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

— Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. — Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. — Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. — Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

4 Coop Group in figures Annual consolidated financial statements 118 Coop Group Annual Report 2019

— Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. — Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report, unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In accordance with article 906 CO in connection with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

Jürg Meisterhans Sandra Terzic Licensed Audit Expert Licensed Audit Expert Auditor in Charge

Basel, 12 February 2020

KPMG AG, Viaduktstrasse 42, PO Box 3456, CH-4002 Basel

KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. 5 Coop Group in figures Annual consolidated financial statements 119 Coop Group Annual Report 2019